QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30,
2016

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from
to

Commission File Number: 001-34885

AMYRIS, INC.

(Exact name of registrant as specified in its charter)

Delaware

55-0856151

(State or other jurisdiction
of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Amyris, Inc.

5885 Hollis Street, Suite 100

Emeryville, CA 94608

(510) 450-0761

(Address and telephone number of
principal executive offices)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes
x
No
o

Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuance to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes
x
No
o

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer

o

Accelerated filer

x

Non-accelerated filer

o

Smaller reporting company

o

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes
o
No
x

Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date.

Common stock - $0.0001 par value, 500,000,000 and 400,000,000 shares authorized as of September 30, 2016 and
December 31, 2015, respectively; 253,364,428 and 206,130,282 shares issued and outstanding as of September 30, 2016 and December
31, 2015, respectively

25

21

Additional paid-in capital

963,075

926,216

Accumulated other comprehensive loss

(39,801

)

(47,198

)

Accumulated deficit

(1,085,683

)

(1,037,104

)

Total Amyris, Inc. stockholders’ deficit

(162,384

)

(158,065

)

Noncontrolling interest

(114

)

(391

)

Total stockholders' deficit

(162,498

)

(158,456

)

Total liabilities, mezzanine equity and stockholders' deficit

$

99,419

$

106,116

See the accompanying notes to the unaudited condensed consolidated
financial statements.

3

Amyris, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Shares and Per Share Amounts)

(Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2016

2015

2016

2015

Revenues

Renewable product sales

$

5,430

$

4,226

$

13,493

$

9,661

Related party renewable product sales

1,390

2

1,390

2

Total product sales

6,820

4,228

14,883

9,663

Grants and collaborations revenue

19,724

4,363

30,071

14,643

Total revenues

26,544

8,591

44,954

24,306

Cost and operating expenses

Cost of products sold

14,876

8,455

33,945

26,057

Loss on purchase commitments and impairment of property, plant and equipment

—

7,259

—

7,259

Research and development

12,315

10,343

37,397

33,521

Sales, general and administrative

11,381

14,103

35,055

42,859

Total cost and operating expenses

38,572

40,160

106,397

109,696

Loss from operations

(12,028

)

(31,569

)

(61,443

)

(85,390

)

Other income (expense):

Interest income

68

61

207

205

Interest expense

(7,927

)

(16,559

)

(25,989

)

(71,027

)

Gain (loss) from change in fair value of derivative instruments

(786

)

(21,690

)

41,826

(10,268

)

Loss upon extinguishment of debt

(217

)

(5,984

)

(866

)

(5,984

)

Other income (expense), net

1,334

(168

)

(1,912

)

(1,204

)

Total other income (expense)

(7,528

)

(44,340

)

13,266

(88,278

)

Loss before income taxes and loss from investments in affiliates

(19,556

)

(75,909

)

(48,177

)

(173,668

)

Provision for income taxes

(148

)

(119

)

(402

)

(355

)

Net loss before loss from investments in affiliates

(19,704

)

(76,028

)

(48,579

)

(174,023

)

Loss from investments in affiliates

—

(660

)

—

(2,089

)

Net loss

(19,704

)

(76,688

)

(48,579

)

(176,112

)

Net loss attributable to noncontrolling interest

—

24

—

78

Net loss attributable to Amyris, Inc. common stockholders

$

(19,704

)

$

(76,664

)

$

(48,579

)

$

(176,034

)

Net loss per share attributable to common stockholders:

Basic

$

(0.08

)

$

(0.55

)

$

(0.21

)

$

(1.76

)

Diluted

$

(0.08

)

$

(0.55

)

$

(0.28

)

$

(1.76

)

Weighted-average shares of common stock outstanding used in computing net loss per share of common stock:

Basic

249,190,339

140,374,297

226,772,159

100,103,007

Diluted

249,190,339

140,374,297

268,375,111

100,103,007

See the accompanying notes to the unaudited condensed consolidated
financial statements.

Cancellation of debt and accrued interest on disposal of interest in affiliate

$

4,252

$

—

Non-cash investment in joint venture

$

600

$

—

See the accompanying notes to the unaudited condensed consolidated
financial statements.

8

Amyris, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. The Company

Amyris, Inc. (or "the Company") was
incorporated in California on July 17, 2003 and reincorporated in Delaware on June 10, 2010 for the purpose of leveraging breakthroughs
in bioscience technology to develop and provide renewable compounds for a variety of markets. The Company is currently applying
its industrial synthetic biology platform to engineer, manufacture and sell high performance, low cost products into a variety
of consumer and industrial markets, including cosmetics, flavors & fragrances (or "F&F"), solvents and cleaners,
polymers, lubricants, healthcare products and fuels, and it is seeking to apply its technology to the development of pharmaceutical
products. The Company's first commercialization efforts have been focused on a renewable hydrocarbon molecule called farnesene
(Biofene®), which forms the basis for a wide range of products including emollients, flavors and fragrance oils and diesel
fuel. While the Company's platform is able to use a wide variety of feedstocks, the Company has focused on Brazilian sugarcane
because of its abundance, low cost and relative price stability. The Company has established two principal operating subsidiaries,
Amyris Brasil Ltda. (formerly Amyris Brasil S.A., or "Amyris Brasil") for production in Brazil, and Amyris Fuels, LLC
(or "Amyris Fuels").

The Company's renewable products business strategy
is to focus on direct commercialization of specialty products while moving established commodity products into collaboration or
joint venture arrangements with leading industry partners. To commercialize its products, the Company must be successful in using
its technology to manufacture products at commercial scale and on an economically viable basis (i.e., low per unit production costs)
and developing sufficient sales volume for those products to support its operations. The Company's prospects are subject to risks,
expenses and uncertainties frequently encountered by companies in this stage of development.

Liquidity

The Company expects to fund its operations for
the foreseeable future with cash and investments currently on hand, cash inflows from collaborations and grants, cash contributions
from product sales, and proceeds from new debt and equity financings as well as strategic asset divestments. The Company's planned
2016 and 2017 working capital needs and its planned operating and capital expenditures are dependent on significant inflows of
cash from new and existing collaboration partners and from cash generated from renewable product sales, and will also require additional
funding from debt or equity financings as well as proceeds from strategic asset divestments.

The Company has incurred significant operating losses since its inception and believes that it will continue
to incur losses and negative cash flow from operations into at least 2017. As of September 30, 2016, the Company had negative
working capital of $110.6 million, an accumulated deficit of $1,085.7 million, and cash, cash equivalents and short term investments
of $2.3 million. The Company will need to raise cash from additional financings or strategic asset divestments as early as the
fourth quarter of 2016 to support its liquidity needs. These factors raise substantial doubt about the Company’s ability
to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty. If the Company is unable to continue as a going concern, it may be unable to meet its obligations under its existing
debt facilities, which could result in an acceleration of its obligation to repay all amounts outstanding under those facilities,
and it may be forced to liquidate its assets.

As of September 30, 2016, the Company's debt, net of discount and issuance costs of $36.1 million, totaled
$175.6 million, of which $75.0 million is classified as current. In addition to upcoming debt maturities, the Company's debt service
obligations over the next twelve months are significant, including $16.2 million of anticipated cash interest payments. The Company's
debt agreements contain various covenants, including certain restrictions on the Company's business that could cause the Company
to be at risk of defaults, such as the requirement to maintain unrestricted, unencumbered cash in defined U.S. bank accounts in
an amount equal to at least 50% of the principal amount outstanding under its loan facility with Stegodon Corporation (or “Stegodon”),
as assignee of Hercules Capital, Inc. As discussed below, in connection with the execution by the Company and Ginkgo Bioworks,
Inc., an affiliate of Stegodon, of certain commercial agreements (see Note 8, “Significant Agreements” for further
details), on June 29, 2016, the Company received a waiver of compliance with such covenant through October 31, 2016 and on October
6, 2016, the Company and Stegodon entered into an amendment to the loan facility pursuant to which, among other things, Stegodon
waived such covenant until the maturity date of the facility. A failure to comply with the covenants and other provisions
of the Company’s debt instruments, including any failure to make a payment when required would generally result in events
of default under such instruments, which could permit acceleration of such indebtedness. If such indebtedness is accelerated, it
would generally also constitute an event of default under the Company’s other outstanding indebtedness, permitting acceleration
of such other outstanding indebtedness. Any required repayment of such indebtedness as a result of acceleration or otherwise would
consume current cash on hand such that the Company would not have those funds available for use in its business or for payment
of other outstanding indebtedness. Please refer to Note 5, “Debt”, Note 6, “Commitments and Contingencies”
and Note 18, “Subsequent Events” for further details regarding the Company's debt service obligations and commitments.
The Company also has significant outstanding debt and contractual obligations related to capital and operating leases, as well
as purchase commitments.

9

In addition to the need for financing described above, the Company
may take the following actions to support its liquidity needs through the remainder of 2016 and into 2017:

•

Effect significant headcount reductions, particularly with respect to employees not connected to critical or contracted activities
across all functions of the Company, including employees involved in general and administrative, research and development, and
production activities.

•

Shift focus to existing products and customers with significantly reduced investment in new product and commercial development
efforts.

•

Reduce production activity at the Company’s Brotas manufacturing facility to levels only sufficient to satisfy volumes
required for product revenues forecast from existing products and customers.

•

Reduce expenditures for third party contractors, including consultants, professional advisors and other vendors.

Closely monitor the Company’s working capital position with customers and suppliers, as well as suspend operations at
pilot plants and demonstration facilities.

Implementing this plan could have a negative
impact on the Company's ability to continue its business as currently contemplated, including, without limitation, delays or failures
in its ability to:

•

Achieve planned production levels;

•

Develop and commercialize products within planned timelines or at planned scales; and

•

Continue other core activities.

Furthermore, any inability to scale-back operations
as necessary, and any unexpected liquidity needs, could create pressure to implement more severe measures. Such measures could
have an adverse effect on the Company's ability to meet contractual requirements, including obligations to maintain manufacturing
operations, and increase the severity of the consequences described above.

10

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim condensed consolidated
financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of
America (or “GAAP”) and with the instructions for Form 10-Q and Regulation S-X. Accordingly, they do not include all
of the information and notes required for complete financial statements. These interim condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Form
10-K for the fiscal year ended December 31, 2015 as filed with the Securities and Exchange Commission (or the “SEC”)
on March 30, 2016. The unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated
subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The Company uses the equity method to account
for investments in companies, if its investments provide it with the ability to exercise significant influence over operating and
financial policies of the investee. Consolidated net income or loss includes the Company’s proportionate share of the net
income or loss of these companies. Judgments made by the Company regarding the level of influence over each equity method investment
include considering key factors such as the Company’s ownership interest, representation on the board of directors, participation
in policy-making decisions and material intercompany transactions.

Principles of Consolidation

The condensed consolidated financial statements
of the Company include the accounts of Amyris, Inc., its subsidiaries and two consolidated variable interest entities (or “VIEs”),
with respect to which the Company is considered the primary beneficiary, after elimination of intercompany accounts and transactions.
Disclosure regarding the Company’s participation in the VIEs is included in Note 7, "Joint Ventures and Noncontrolling
Interest."

Variable Interest Entities

The Company has interests in joint venture entities
that are VIEs. Determining whether to consolidate a VIE requires judgment in assessing (i) whether an entity is a VIE and
(ii) if the Company is the entity’s primary beneficiary and thus required to consolidate the entity. To determine if
the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (i) the power to direct the activities
that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or the right
to receive benefits of the VIE that could potentially be significant to the VIE. The Company’s evaluation includes identification
of significant activities and an assessment of its ability to direct those activities based on governance provisions and arrangements
to provide or receive product and process technology, product supply, operations services, equity funding and financing and other
applicable agreements and circumstances. The Company’s assessment of whether it is the primary beneficiary of its VIEs requires
significant assumptions and judgment.

Use of Estimates

In preparing the unaudited condensed consolidated
financial statements, management must make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Unaudited Interim Financial Information

The accompanying interim condensed consolidated
financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual consolidated financial
statements, except for the impact of adoption of certain accounting standards as described below, and in the opinion of management,
reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations
for the periods presented. In the quarter ended March 31, 2016 the Company adopted Accounting Standards Update (“ASU”)
No. 2015-01,
Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,
ASU No. 2015-02,
Consolidation
(Topic 810), ASU No. 2015-03,
Interest - Imputation of Interest
(Subtopic 835-30):
Simplifying the
Presentation of Debt Issuance Costs
, ASU 2015-05,
Intangibles - Goodwill and Other - Internal-Use Software
(Subtopic
350-40) and ASU No. 2015-15,
Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements
.
Refer to Note 5. "Debt" for the impact of adoption of ASU No. 2015-03 on the Company's condensed consolidated financial
statements. None of the other ASU’s adopted had a material impact on the Company’s condensed consolidated financial
statements.

11

The year-end condensed consolidated balance
sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed
consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the
full year or for any other future year or interim period.

Recent Accounting Pronouncements

In October 2016, the Financial Accounting Standards
Board (or “FASB”) issued
ASU 2016-16,
Intra-Entity Transfers of Assets Other Than Inventory
on simplifying
the accounting for income taxes related to intra-entity asset transfers. The new guidance allows an entity to recognize the
tax expense from the sale of an asset in the seller’s tax jurisdiction when the transfers occurs, even though the pre-tax
effects of that transaction are eliminated in consolidation. This guidance will be effective for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2017. Early adoption is permitted only in the first quarter of 2017. The
Company is evaluating the impact of adopting this new accounting standard update on the financial statements and related
disclosures.

In
August 2016, the FASB issued ASU 2016-15
Classification of Certain Cash Receipts and Cash Payments
on the statement of cash
flows. The new guidance clarifies classification of certain cash receipts and cash payments in the statement of cash flows. This
guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and
interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact of adopting this new
accounting standard update on the financial statements and related disclosures.

In June 2016, the Financial Accounting
Standards Board (or “FASB”) issued ASU No. 2016-13,
Allowance for Loan and Lease Losses (Financial Instruments -
Credit Losses Topic 326.)
. New impairment guidance for certain financial instruments (including trade receivables) will replace
the current “incurred loss” model for estimating credit losses with a forward looking “expected loss” model.
The ASU is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within
those fiscal years. Early application is permitted as of the fiscal years beginning after December 15, 2018, including interim
periods within those fiscal years. The Company is evaluating the impact of this standard on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09,
Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
. This ASU identifies
areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax
consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense
with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This ASU will
be effective for fiscal years beginning after December 15, 2016, and interim periods within those annual periods. The Company is
currently assessing the potential impact of this ASU on its consolidated financial statements. Early adoption is permitted. The
Company is currently assessing the potential impact of this ASU on its consolidated financial statements. Early adoption is permitted.

In March 2016, the FASB issued ASU No. 2016-06,
Contingent Put and Call Options in Debt Instruments
. The amendments in this ASU clarify the requirements for assessing whether
contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related
to their debt hosts. An entity performing the assessment under the amendments in this ASU is required to assess the embedded call
(put) options solely in accordance with the four-step decision sequence. The ASU is effective for financial statements issued for
fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The
Company is currently assessing the potential impact of this ASU on its financial statements.

In February 2016, the FASB issued Accounting
Standards Update (or “ASU”)
2016-02-
Leases
with fundamental changes to how entities
account for leases.
Lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their
leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of
lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. Additional disclosures
for leases will also be required. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning
after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition,
and provides for certain practical expedients. The new standard may materially impact the Company’s financial statements.

In January 2016, the FASB issued ASU 2016-01
Financial Instruments-Overall
, which address certain aspects of recognition, measurement, presentation, and disclosure of
financial instruments. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, including
interim periods within those fiscal years. Earlier application is permitted under specific circumstances. The Company is currently
assessing the potential impact of this standard on its consolidated financial statements.

12

In July 2015, the FASB issued ASU 2015-11,
Simplifying
the Measurement of Inventory
, which requires that inventory within the scope of the guidance be measured at the lower of cost
and net realizable value. The new standard is being issued as part of the simplification initiative. Prior to the issuance of the
standard, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of
net realizable value and floor of net realizable value less a normal profit margin). The new guidance will be effective for fiscal
years beginning after December 15, 2016, including interim periods within those years. Prospective application is required and
early adoption is permitted. The Company is currently assessing the impact of adopting this new accounting standard on its financial
statements.

In August 2014, the FASB issued new guidance
related to the disclosure around going concern. The new standard provides guidance around management's responsibility to evaluate
whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosure
if substantial doubt exists. The new standard is effective for annual periods ending after December 15, 2016 and for annual periods
and interim periods thereafter. Early adoption is permitted. The adoption of this standard is not expected to have a material impact
on the Company's financial statements.

In May 2014, the FASB issued new guidance related to revenue recognition. In March, April and May 2016,
the FASB issued additional amendments to the new revenue guidance relating to reporting revenue on a gross versus net basis, identifying
performance obligations, licensing arrangements, collectability, noncash consideration, presentation of sales tax, and transition.
This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue
recognition update guidance provides a unified model to determine how revenue is recognized. The core principle of the guidance
is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The
FASB has issued several updates to the standard which i) clarify the application of the principal versus agent guidance (ASU 2016-08);
ii) clarify the guidance on inconsequential and perfunctory promises and licensing (ASU 2016-10) and iii)
narrow-scope improvements
and practical expedients (ASU 2016-12). On July 9, 2015, the FASB voted to defer the effective date by one year to December 15,
2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before
the original effective date of December 15, 2016. Entities have the option of using either a full retrospective or a modified retrospective
approach to adopt the new standard. Therefore, the new standard will be effective commencing with our quarter ending March 31,
2018. The Company is currently assessing the potential impact of this new standard on its consolidated financial statements and
has not selected the transition method.

3. Fair Value of Financial Instruments

The inputs to the valuation techniques used
to measure fair value are classified into the following categories:

Level 3: Unobservable inputs that are
not corroborated by market data.

13

There were no transfers between the levels,
and as of September 30, 2016, the Company’s financial assets and financial liabilities at fair value were classified
within the fair value hierarchy as follows (in thousands):

Level 1

Level 2

Level 3

Balance as of
September 30,
2016

Financial Assets

Money market funds

$

59

$

—

$

—

$

59

Certificates of deposit

1,713

—

—

1,713

Total financial assets

$

1,772

$

—

$

—

$

1,772

Financial Liabilities

Loans payable
(1)

$

—

$

34,146

$

—

$

34,146

Credit facilities
(1)

—

19,310

—

19,310

Convertible notes
(1)

—

—

109,885

109,885

Compound embedded derivative liabilities

—

—

3,827

3,827

Currency interest rate swap derivative liability

—

3,471

—

3,471

Total financial liabilities

$

—

$

56,927

$

113,712

$

170,639

(1)
These liabilities are carried on the condensed consolidated balance sheet on a historical cost basis.

The Company’s assessment of the significance
of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors
specific to the asset or liability. The fair values of money market funds and certificates of deposit are based on fair values
of identical assets. The fair values of the loans payable, convertible notes, credit facilities and currency interest rate swaps
are based on the present value of expected future cash flows and assumptions about current interest rates and the creditworthiness
of the Company. The method of determining the fair value of the compound embedded derivative liabilities is described subsequently
in this note. Market risk associated with the fixed and variable rate long-term loans payable, credit facilities and convertible
notes relates to the potential reduction in fair value and negative impact to future earnings, from an increase in interest rates.
Market risk associated with the compound embedded derivative liabilities relates to the potential reduction in fair value and negative
impact to future earnings from a decrease in interest rates.

The carrying amounts of certain financial instruments,
such as cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively
short maturities and low market interest rates, if applicable.

As of December 31, 2015, the Company’s
financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy
as follows (in thousands):

Level 1

Level 2

Level 3

Balance as of
December 31,
2015

Financial Assets

Money market funds

$

2,078

$

—

$

—

$

2,078

Certificates of deposit

1,520

—

—

1,520

Total financial assets

$

3,598

$

—

$

—

$

3,598

Financial Liabilities

Loans payable
(1)

$

—

$

9,541

$

—

$

9,541

Credit facilities
(1)

—

34,893

—

34,893

Convertible notes
(1)

—

—

96,291

96,291

Compound embedded derivative liabilities

—

—

46,430

46,430

Currency interest rate swap derivative liability

—

5,009

—

5,009

Total financial liabilities

$

—

$

49,443

$

142,721

$

192,164

_______

(1)
These liabilities are carried on the consolidated balance sheet on a historical cost basis (noting that the Remaining Notes subject
to the Maturity Treatment Agreement were revalued to fair value on July 29, 2015, see Note 5 “Debt” for details).

14

The following table provides a reconciliation
of the beginning and ending balances for the convertible notes disclosed at fair value using significant unobservable inputs (Level
3) (in thousands):

2016

Balance at January 1

$

96,291

Additions of convertible notes

13,000

Conversion/extinguishment of convertible notes

(21,579

)

Change in fair value of convertible notes

22,173

Balance at September 30

$

109,885

Derivative Instruments

The following table provides a reconciliation
of the beginning and ending balances for the compound embedded derivative liabilities measured at fair value using significant
unobservable inputs (Level 3) (in thousands):

2016

Balance at January 1

$

46,430

Derecognition on conversion/extinguishment

(2,734

)

Gain from change in fair value of derivative liabilities

(39,869

)

Balance at September 30

$

3,827

The compound embedded derivative liabilities
represent the fair value of the equity conversion options and "make-whole" provisions, as well as the down round conversion
price adjustment or conversion rate adjustment provisions of the R&D Notes, the Tranche I Notes, the Tranche II Notes, the
2014 144A Notes and the 2015 144A Notes (see Note 5, "Debt"). There is no current observable market for these types of
derivatives and, as such, the Company determined the fair value of the embedded derivatives using a Monte Carlo simulation valuation
model for the R&D Notes and the binomial lattice model for the Tranche I Notes, the Tranche II Notes, the 2014 144A Notes and
the 2015 144A Notes (collectively, "the Convertible Notes"). A Monte Carlo simulation valuation model combines expected
cash outflows with market-based assumptions regarding risk-adjusted yields, stock price volatility, probability of a change of
control and the trading information of the Company's common stock into which the notes are or may be convertible. A binomial lattice
model generates two probable outcomes - one up and another down - arising at each point in time, starting from the date of valuation
until the maturity date. A lattice model was used to determine if the Convertible Notes would be converted, called or held at each
decision point. Within the lattice model, the following assumptions are made: (i) the Convertible Notes will be converted early
if the conversion value is greater than the holding value and (ii) the Convertible Notes will be called if the holding value is
greater than both (a) redemption price and (b) the conversion value at the time. If the Convertible Notes are called, then the
holder will maximize their value by finding the optimal decision between (1) redeeming at the redemption price and (2) converting
the Convertible Notes. Using this lattice method, the Company valued the embedded derivatives using the "with-and-without
method", where the fair value of the Convertible Notes including the embedded derivative is defined as the "with",
and the fair value of the Convertible Notes excluding the embedded derivatives is defined as the "without". This method
estimates the fair value of the embedded derivatives by looking at the difference in the values between the Convertible Notes with
the embedded derivatives and the fair value of the Convertible Notes without the embedded derivatives. The lattice model uses the
stock price, conversion price, maturity date, risk-free interest rate, estimated stock volatility and estimated credit spread.
The Company marks the compound embedded derivatives to market due to the conversion price not being indexed to the Company's own
stock. As of September 30, 2016 and December 31, 2015, included in "Derivative Liabilities" on the condensed consolidated
balance sheet are the Company's compound embedded derivative liabilities of $3.8 million and $46.4 million, respectively.

15

The market-based assumptions and estimates used
in valuing the compound embedded derivative liabilities include amounts in the following ranges/amounts:

September 30, 2016

September 30, 2015

Risk-free interest rate

0.20%

-

0.84%

0.93%

-

1.07%

Risk-adjusted yields

17.30%

-

27.43%

24.40%

-

39.90%

Stock-price volatility

45%

45%

Probability of change in control

5%

5%

Stock price

$0.58

$2.01

Credit spread

16.49%

-

26.60%

28.81%

-

38.83%

Estimated conversion dates

2016

-

2019

2015

-

2019

Changes in valuation assumptions can have a significant impact on the valuation of the embedded derivative liabilities.
For example, all other things being equal, a decrease/increase in the Company’s stock price, probability of change of control,
credit spread, term to maturity/conversion or stock price volatility decreases/increases the valuation of the liabilities, whereas
a decrease/increase in risk adjusted yields or risk-free interest rates increases/decreases the valuation of the liabilities. The
conversion price of certain of the Convertible Notes also include conversion price adjustment features where, for example, issuances
of common stock by the Company at prices lower than the conversion price result in a reset of the conversion price of such notes,
which increases the value of the embedded derivative liabilities. See Note 5, "Debt" for further details of conversion
price adjustment features.

In June 2012, the Company entered into a loan
agreement with Banco Pine S.A. (or "Banco Pine") under which Banco Pine provided the Company with a loan (or the "Banco
Pine Bridge Loan") (see Note 5, "Debt"). At the time of the Banco Pine Bridge Loan, the Company also entered into
a currency interest rate swap arrangement with Banco Pine with respect to the repayment of R$22.0 million (approximately US$6.8
million based on the exchange rate as of September 30, 2016) of the Banco Pine Bridge Loan. The swap arrangement exchanges
the principal and interest payments under the Banco Pine Bridge Loan for alternative principal and interest payments that are subject
to adjustment based on fluctuations in the foreign exchange rate between the U.S. dollar and Brazilian real. The swap has a fixed
interest rate of 3.94%. Changes in the fair value of the swap are recognized in “Gain (loss) from change in fair value of
derivative instruments" in the condensed consolidated statements of operations are as follows (in thousands):

Income
Statement Classification

Three Months Ended
September 30,

Nine Months Ended
September 30,

Type of Derivative Contract

2016

2015

2016

2015

Currency interest rate swap

Gain (loss) from change in fair value of derivative instruments

$

(145

)

$

(1,796

)

$

1,957

$

(3,201

)

Derivative instruments measured at fair value
as of September 30, 2016 and December 31, 2015, and their classification on the condensed consolidated balance sheets
are as follows (in thousands):

September 30,
2016

December 31,
2015

Fair market value of compound embedded derivative liabilities

$

3,827

$

46,430

Fair value of swap obligations

3,471

5,009

Total derivative liabilities

$

7,298

$

51,439

16

4. Balance Sheet Components

Inventories, net

Inventories, net are stated at the lower of
cost or market and comprise of the following (in thousands):

September 30,
2016

December 31,
2015

Raw materials

$

2,664

$

2,204

Work-in-process

1,809

3,583

Finished goods

3,426

5,099

Inventories, net

$

7,899

$

10,886

Property, Plant and Equipment, net

Property, plant and equipment, net is comprised
of the following (in thousands):

September 30,
2016

December 31,
2015

Machinery and equipment

$

85,538

$

72,876

Leasehold improvements

38,791

38,519

Computers and software

9,545

9,117

Buildings

4,718

3,922

Furniture and office equipment

2,335

2,234

Vehicles

195

215

Construction in progress

6,430

5,736

147,552

132,619

Less: accumulated depreciation and amortization

(84,459

)

(72,822

)

Property, plant and equipment, net

$

63,093

$

59,797

The Company's first, purpose-built, large-scale
Biofene production plant in southeastern Brazil commenced operations in December 2012. This plant is located at Brotas in the state
of São Paulo, Brazil and is adjacent to an existing sugar and ethanol mill, Tonon Bioenergia S.A. (or “Tonon”)
(formerly Paraíso Bioenergia) with which the Company has an agreement to purchase a certain number of tons of sugarcane
per year, along with specified water and vapor volumes.

Property, plant and equipment, net includes
$2.3 million and $2.7 million of machinery and equipment under capital leases as of September 30, 2016 and December 31,
2015, respectively. Accumulated amortization of assets under capital leases totaled $0.4 million and $0.5 million as of September 30,
2016 and December 31, 2015, respectively.

Depreciation and amortization expense, including
amortization of assets under capital leases was $2.9 million and $3.1 million for the three months ended September 30, 2016
and 2015, respectively, and $8.6 million and $9.9 million for the nine months ended September 30, 2016 and 2015, respectively.

17

Other Assets (non-current)

Other assets are comprised of the following
(in thousands):

September 30,
2016

December 31,
2015

Recoverable taxes from Brazilian government entities

$

11,955

$

8,887

Deposits on property and equipment, including taxes

292

243

Other

1,410

1,227

Total other assets

$

13,657

$

10,357

Accrued and Other Current Liabilities

Accrued and other current liabilities are comprised
of the following (in thousands):

September 30,
2016

December 31,
2015

Withholding tax related to conversion of related party notes

$

4,964

$

4,723

Professional services

5,406

4,017

SMA relocation accrual

4,380

3,641

Accrued interest

8,283

1,984

Tax-related liabilities

2,325

2,505

Accrued vacation

1,932

2,023

Payroll and related expenses

4,268

3,122

Deferred rent, current portion

1,110

1,111

Contractual obligations to contract manufacturers

680

—

Fair value swap short-term

586

—

Other

978

1,142

Total accrued and other current liabilities

$

34,912

$

24,268

5. Debt and Mezzanine Equity

Debt and mezzanine equity are comprised of the
following (in thousands):

In March 2014, the Company entered into a Loan
and Security Agreement with Hercules Technology Growth Capital, Inc. (or “Hercules”) to make available to Amyris a
loan facility in the aggregate principal amount of up to $25.0 million (or the "Senior Secured Loan Facility"), which
loan facility was fully drawn at the closing. The initial loan of $25.0 million under the Senior Secured Loan Facility accrues
interest at a rate per annum equal to the greater of either the prime rate reported in the Wall Street Journal plus 6.25% or 9.50%.
The Company may repay the outstanding amounts under the Senior Secured Credit Facility before the maturity date (February 1, 2017)
if it pays an additional fee of 1% of the outstanding loans. The Company was also required to pay a 1% facility charge at the closing
of the Senior Secured Credit Facility, and is required to pay a 10% end of term charge with respect to the initial loan of $25.0
million. In connection with the execution of the Senior Secured Loan Facility, Amyris agreed to certain customary representations
and warranties and covenants, as well as certain covenants that were subsequently amended (as described below).

In June 2014, the Company and Hercules entered
into a first amendment of the Senior Secured Loan Facility. Pursuant to the first amendment, the parties agreed to adjust the term
loan maturity date from May 31, 2015 to February 1, 2017 and remove (i) a requirement for the Company to pay a forbearance
fee of $10.0 million in the event certain covenants were not satisfied, (ii) a covenant that the Company maintain positive cash
flow commencing with the fiscal quarter beginning October 1, 2014, (iii) a covenant that, beginning with the fiscal quarter beginning
July 1, 2014, the Company and its subsidiaries achieve certain projected cash product revenues and projected cash product gross
profits, and (iv) an obligation for the Company to file a registration statement on Form S-3 with the SEC by no later than June
30, 2014 and complete an equity financing of more than $50.0 million by no later than September 30, 2014. The Company further agreed
to include a new covenant requiring the Company to maintain unrestricted, unencumbered cash in defined U.S. bank accounts in an
amount equal to at least 50% of the principal amount then outstanding under the Senior Secured Loan Facility (or the “Minimum
Cash Covenant”) and borrow an additional $5.0 million. The additional $5.0 million borrowing was completed in June 2014,
and accrues interest at a rate per annum equal to the greater of (i) the prime rate reported in the Wall Street Journal plus 5.25%
and (ii) 8.5%.

In March 2015, the Company and Hercules entered
into a second amendment of the Senior Secured Loan Facility. Pursuant to the second amendment, the parties agreed to, among other
things, establish an additional credit facility in the principal amount of up to $15.0 million, which would be available to be
drawn by the Company through the earlier of March 31, 2016 or such time as the Company raised an aggregate of at least $20.0 million
through the sale of new equity securities. Under the terms of the second amendment, the Company agreed to pay Hercules a 3.0% facility
availability fee on April 1, 2015. The Company had the ability to cancel the additional facility at any time prior to June 30,
2015 at its own option, and the additional facility would terminate upon the Company securing a new equity financing of at least
$20.0 million. If the facility was not canceled, and any outstanding borrowings were not repaid, before June 30, 2015, an additional
5.0% facility fee would become payable on June 30, 2015. The Company did not cancel the facility prior to June 30, 2015, and the
5.0% facility fee became payable as of June 30, 2015. The Company did not pay the additional facility fee and thereafter received
a waiver from Hercules with respect thereto. The additional facility was cancelled undrawn upon the completion of the Company’s
private offering of common stock and warrants in July 2015.

In November 2015, the Company and Hercules entered into a third amendment of the Senior Secured Loan Facility.
Pursuant to the third amendment, the Company borrowed $10,960,000 (or the “Third Amendment Borrowed Amount”) from Hercules
on November 30, 2015. As of December 1, 2015, after the funding of the Third Amendment Borrowed Amount (and including repayment
of $9.1 million of principal that had occurred prior to the third amendment), the aggregate principal amount outstanding under
the Senior Secured Loan Facility was approximately $31.7 million. The Third Amendment Borrowed Amount accrues interest at a rate
per annum equal to the greater of (i) 9.5% and (ii) the prime rate reported in the Wall Street Journal plus 6.25%, and, like the
previous loans under the Senior Secured Loan Facility, has a maturity date of February 1, 2017. Upon the earlier of the maturity
date, prepayment in full or such obligations otherwise becoming due and payable, in addition to repaying the outstanding Third
Amendment Borrowed Amount (and all other amounts owed under the Senior Secured Loan Facility, as amended), the Company is also
required to pay an end-of-term charge of $767,200. Pursuant to the third amendment, the Company also paid Hercules fees of $1.0
million, $750,000 of which was owed in connection with the expired $15.0 million facility under the second amendment and $250,000
of which was related to the Third Amendment Borrowed Amount. Under the third amendment, the parties agreed that the Company would,
commencing on December 1, 2015, be required to pay only the interest accruing on all outstanding loans under the Senior Secured
Loan Facility until February 29, 2016. Commencing on March 1, 2016, the Company would have been required to begin repaying principal
of all loans under the Senior Secured Loan Facility, in addition to the applicable interest. However, pursuant to the third amendment,
the Company could, by achieving certain cash inflow targets in 2016, extend the interest-only period to December 1, 2016. Upon
the issuance by the Company of $20.0 million of unsecured promissory notes and warrants in a private placement in February 2016
for aggregate cash proceeds of $20.0 million, the Company satisfied the conditions for extending the interest-only period to May
31, 2016. On June 1, 2016, the Company commenced the repayment of outstanding principal under the Senior Secured Loan Facility.
In June 2016, the Company was notified by Hercules that it had transferred and assigned its rights and obligations under the Senior
Secured Loan Facility to Stegodon Corporation (or “Stegodon”). On June 29, 2016, in connection with the execution by
the Company and Ginkgo Bioworks, Inc., an affiliate of Stegodon, of an initial strategic partnership agreement, the Company received
a deferment from Stegodon of all scheduled principal repayments under the Senior Secured Loan Facility, as well as a waiver of
the Minimum Cash Covenant, through October 31, 2016. Refer to Note 8, “Significant Agreements” for additional details.
On October 6, 2016, in connection with the execution by the Company and Ginkgo Bioworks, Inc. of a definitive collaboration agreement,
the Company and Stegodon entered into a fourth amendment of the Senior Secured Loan Facility, pursuant to which the parties agreed
to (i) subject to the Company extending the maturity of certain of its other outstanding indebtedness, extend the maturity date
of the Senior Secured Loan Facility, (ii) make the Senior Secured Loan Facility interest-only until maturity, subject to the requirement
that the Company apply certain monies received under the collaboration agreement between the Company and Ginkgo Bioworks, Inc.
to repay the amounts outstanding under the Senior Secured Loan Facility, up to a maximum amount of $1 million per month and (iii)
waive the Minimum Cash Covenant until the maturity date of the Senior Secured Loan Facility. Refer to Note 8, “Significant
Agreements” and Note 18, “Subsequent Events” for additional details.

19

As of September 30, 2016, $28.4 million was outstanding under the Senior Secured Loan Facility, net
of discount and issuance costs of $0.1 million. The Senior Secured Loan Facility is secured by liens on the Company's assets, including
on certain Company intellectual property. The Senior Secured Loan Facility includes customary events of default, including failure
to pay amounts due, breaches of covenants and warranties, material adverse effect events, certain cross defaults and judgments,
and insolvency. If an event of default occurs, Stegodon may require immediate repayment of all amounts outstanding under the Senior
Secured Loan Facility. The Company was in compliance with the covenants under the Senior Secured Loan Facility as of September
30, 2016.

BNDES Credit Facility

In December 2011, the Company entered
into a credit facility with the Brazilian Development Bank (or “BNDES” and such credit facility, the “BNDES
Credit Facility”) in the amount of R$22.4 million (approximately US$6.9 million based on the exchange rate as of
September 30, 2016). This BNDES Credit Facility was extended as project financing for a production site in Brazil. The
credit line was divided into an initial tranche of up to approximately R$19.1 million and an additional tranche of
approximately R$3.3 million that would become available upon delivery of additional guarantees. The credit line was cancelled
in 2013.

The principal of the loans under the BNDES Credit
Facility is required to be repaid in 60 monthly installments, with the first installment paid in January 2013 and the last due
in December 2017. Interest was due initially on a quarterly basis with the first installment due in March 2012. From and after
January 2013, interest payments are due on a monthly basis together with principal payments. The loaned amounts carry interest
of 7% per annum. Additionally, there is a credit reserve charge of 0.1% on the unused balance from each credit installment from
the day immediately after it is made available through its date of use, when it is paid.

The BNDES Credit Facility is collateralized
by a first priority security interest in certain of the Company's equipment and other tangible assets totaling R$24.9 million (approximately
$7.7 million based on the exchange rate as of September 30, 2016). The Company is a parent guarantor for the payment of the
outstanding balance under the BNDES Credit Facility. Additionally, the Company was required to provide a bank guarantee equal to
10% of the total approved amount (R$22.4 million in total debt) available under the BNDES Credit Facility. For advances of the
second tranche (above R$19.1 million), the Company is required to provide additional bank guarantees equal to 90% of each such
advance, plus additional Company guarantees equal to at least 130% of such advance. The BNDES Credit Facility contains customary
events of default, including payment failures, failure to satisfy other obligations under this credit facility or related documents,
defaults in respect of other indebtedness, bankruptcy, insolvency and inability to pay debts when due, material judgments, and
changes in control of Amyris Brasil. If any event of default occurs, BNDES may terminate its commitments and declare immediately
due all borrowings under the facility. As of September 30, 2016 and December 31, 2015, the Company had R$4.8 million
(approximately US$1.5 million based on the exchange rate as of September 30, 2016) and R$7.6 million (approximately US$1.9
million based on the exchange rate as of December 31, 2015), respectively, in outstanding advances under the BNDES Credit
Facility.

20

FINEP Credit Facility

In November 2010, the Company entered into
a credit facility with Financiadora de Estudos e Projetos (or the “FINEP Credit Facility”). The FINEP Credit Facility
was extended to partially fund expenses related to the Company’s research and development project on sugarcane-based biodiesel
(or the “FINEP Project”) and provided for loans of up to an aggregate principal amount of R$6.4 million (approximately
US$2.0 million based on the exchange rate as of September 30, 2016), which is secured by a chattel mortgage on certain equipment
of Amyris Brasil as well as by bank letters of guarantee. All available credit under this facility is fully drawn.

Interest on loans drawn under the FINEP Credit
Facility is fixed at 5% per annum. In case of default under or non-compliance with the terms of the agreement, the interest
on loans will be dependent on the long-term interest rate as published by the Central Bank of Brazil (such rate, the “TJLP”).
If the TJLP at the time of default is greater than 6%, then the interest will be 5% plus a TJLP adjustment factor, otherwise the
interest will be 11% per annum. In addition, a fine of up to 10% shall apply to the amount of any obligation in default. Interest
on late balances will be 1% per month, levied on the overdue amount. Payment of the outstanding loan balance is being made in 81
monthly installments, which commenced in July 2012 and extends through March 2019. Interest on loans drawn and other charges are
paid on a monthly basis and commenced in March 2011. As of September 30, 2016 and December 31, 2015, the total outstanding
loan balance under this credit facility was R$2.5 million (approximately US$0.8 million based on the exchange rate as of September 30,
2016) and R$3.4 million (approximately US$0.9 million based on exchange rate as of December 31, 2015), respectively.

Convertible Notes

Fidelity

In February 2012, the Company completed
the sale of senior unsecured convertible promissory notes in an aggregate principal amount of $25.0 million pursuant to a securities
purchase agreement, between the Company and certain investment funds affiliated with FMR LLC (or the "Fidelity Securities
Purchase Agreement"). The offering consisted of the sale of 3% senior unsecured convertible promissory notes with a March 1,
2017 maturity date and an initial conversion price equal to $7.0682 per share of the Company's common stock, subject to proportional
adjustment for adjustments to outstanding common stock and anti-dilution provisions in case of dividends and distributions (or
the "Fidelity Notes"). In October 2015, the Company issued $57.6 million of convertible senior notes and used approximately
$8.8 million of the proceeds therefrom to repurchase $9.7 million aggregate principal amount of outstanding Fidelity Notes. As
of September 30, 2016, the Fidelity Notes were convertible into an aggregate of up to 2,165,898 shares of the Company's common
stock. The holders of the Fidelity Notes have a right to require repayment of 101% of the principal amount of the Fidelity Notes
in an acquisition of the Company, and the Fidelity Notes provide for payment of unpaid interest on conversion following such an
acquisition if the note holders do not require such repayment. The Fidelity Securities Purchase Agreement and Fidelity Notes
include covenants regarding payment of interest, maintaining the Company's listing status, limitations on debt, maintenance of
corporate existence, and timely filing of SEC reports. The Fidelity Notes include standard events of default resulting in acceleration
of indebtedness, including failure to pay, bankruptcy and insolvency, cross-defaults and breaches of the covenants in the Fidelity
Securities Purchase Agreement and Fidelity Notes, with default interest rates and associated cure periods applicable to the covenant
regarding SEC reporting. Furthermore, the Fidelity Notes include restrictions on the amount of debt the Company is permitted to
incur. With exceptions for certain existing debt, refinancing of such debt and certain other exclusions and waivers, the Fidelity
Notes provide that the Company's total outstanding debt at any time cannot exceed the greater of $200.0 million or 50% of its consolidated
total assets and its secured debt cannot exceed the greater of $125.0 million or 30% of its consolidated total assets. In connection
with the Company’s closing of a short-term bridge loan for $35.0 million in October 2013, holders of the Fidelity Notes waived
compliance with the debt limitations outlined above as to the $35.0 million bridge loan (or the “Temasek Bridge Note”)
and the August 2013 Financing (defined below). In consideration for such waiver, the Company granted to holders of the Fidelity
Notes or their affiliates the right to purchase up to an aggregate of $7.6 million worth of convertible promissory notes in the
first tranche of the August 2013 Financing.

21

Pursuant to a Securities Purchase Agreement
among the Company, Maxwell (Mauritius) Pte Ltd (or “Temasek”) and Total, dated as of August 8, 2013 (or, as amended,
the “August 2013 SPA”), as amended in October 2013 to include certain entities affiliated with FMR LLC (or the “Fidelity
Entities”), the Company sold and issued certain senior convertible notes (or the “Tranche I Notes”) pursuant
to a financing (or the “August 2013 Financing”) exempt from registration under the Securities Act of 1933, as amended
(or the “Securities Act”), in an aggregate principal amount of $7.6 million to the Fidelity Entities. See "Related
Party Convertible Notes" in this Note 5, "Debt."

2014 Rule 144A Convertible Note Offering

In May 2014, the Company entered into a Purchase
Agreement with Morgan Stanley & Co. LLC, as the initial purchaser (or the “Initial Purchaser”), relating to the
sale of $75.0 million aggregate in principal amount of its 6.50% Convertible Senior Notes due 2019 (or the "2014 144A Notes")
to the Initial Purchaser in a private placement, and for initial resale by the Initial Purchaser to certain qualified institutional
buyers (or the "2014 144A Convertible Note Offering"). In addition, the Company granted the Initial Purchaser an option
to purchase up to an additional $15.0 million aggregate principal amount of 2014 144A Notes, which option expired unexercised according
to its terms. Under the terms of the purchase agreement for the 2014 144A Notes, the Company agreed to customary indemnification
of the Initial Purchaser against certain liabilities. The Notes were issued pursuant to an Indenture, dated as of May 29, 2014
(or the “2014 Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee. The net proceeds
from the offering of the 2014 144A Notes were approximately $72.0 million after payment of the Initial Purchaser’s discounts
and offering expenses. In addition, in connection with obtaining a waiver from Total of its preexisting contractual right
to exchange certain senior secured convertible notes previously issued by the Company for new notes issued in the 2014 144A Convertible
Note Offering, the Company used approximately $9.7 million of the net proceeds to repay previously issued notes (representing the
amount of 2014 144A Notes purchased by Total from the Initial Purchaser). Certain of the Company's affiliated entities purchased
$24.7 million in aggregate principal amount of 2014 144A Notes from the Initial Purchaser (described further below under "Related
Party Convertible Notes"). In October 2015, as discussed below, the Company issued $57.6 million of convertible senior notes
and used approximately $18.3 million of the net proceeds therefrom to repurchase $22.9 million aggregate principal amount of outstanding
2014 144A Notes. The 2014 144A Notes bear interest at a rate of 6.50% per year, payable semiannually in arrears on May 15 and November
15 of each year, beginning November 15, 2014. The 2014 144A Notes mature on May 15, 2019, unless earlier converted or
repurchased. The 2014 144A Notes are convertible into shares of the Company's common stock at any time prior to the close of business
day on May 15, 2019, at the initial conversion rate of 267.037 shares of Common Stock per $1,000 principal amount of 2014 144A
Notes (subject to adjustment in certain circumstances). This represents an effective conversion price of approximately $3.74 per
share of common stock. For any conversion on or after May 15, 2015, in the event that the last reported sale price of the
Company’s common stock for 20 or more trading days (whether or not consecutive) in a period of 30 consecutive trading days
ending within five trading days immediately prior to the date the Company receives a notice of conversion exceeds the then-applicable
conversion price per share on each such trading day, the holders, in addition to the shares deliverable upon conversion, noteholders
will be entitled to receive a cash payment equal to the present value of the remaining scheduled payments of interest that would
have been made on the 2014 144A Notes being converted from the conversion date to the earlier of the date that is three years after
the date the Company receives such notice of conversion and maturity (May 15, 2019), which will be computed using a discount
rate of 0.75%. In the event of a fundamental change, as defined in the 2014 Indenture, holders of the 2014 144A Notes may require
the Company to purchase all or a portion of the 2014 144A Notes at a price equal to 100% of the principal amount of the 2014 144A
Notes, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, holders of
the 2014 144A Notes who convert their 2014 144A Notes in connection with a make-whole fundamental change will, under certain circumstances,
be entitled to an increase in the conversion rate. Refer to the “Exchange” and “Maturity Treatment Agreement”
sections of this Note 5, "Debt", for details of the impact of the Maturity Treatment and Exchange agreements on the 2014
144A Notes.

22

2015 Rule 144A Convertible Note Offering

In October 2015, the Company entered into a
purchase agreement with certain qualified institutional buyers relating to the sale of $57.6 million aggregate principal amount
of its 9.50% Convertible Senior Notes due 2019 (or the “2015 144A Notes”) to the purchasers in a private placement
(or the “2015 144A Offering”). The Notes were issued pursuant to an Indenture, dated as of October 20, 2015 (or the
“2015 Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee. The net proceeds from
the offering of the 2015 144A Notes were approximately $54.4 million after payment of the estimated offering expenses and placement
agent fees. The Company used approximately $18.3 million of the net proceeds to repurchase $22.9 million aggregate principal amount
of outstanding 2014 144A Notes and approximately $8.8 million to repurchase $9.7 million aggregate principal amount of outstanding
Fidelity Notes, in each case held by purchasers of the 2015 144A Notes. The 2015 144A Notes bear interest at a rate of 9.50% per
year, payable semiannually in arrears on April 15 and October 15 of each year, beginning April 15, 2016. Interest on the 2015 144A
Notes is payable, at the Company’s option, entirely in cash or entirely in common stock. The Company elected to make the
April 15, 2016 interest payment in shares of common stock and the October 15, 2016 interest payment in cash. The 2015 144A Notes
will mature on April 15, 2019 unless earlier converted or repurchased.

The 2015 144A Notes are convertible into shares
of the Company's common stock at any time prior to the close of business on April 15, 2019. The 2015 144A Notes had an initial
conversion rate of 443.6557 shares of Common Stock per $1,000 principal amount of 2015 144A Notes (subject to adjustment in certain
circumstances). This represented an initial effective conversion price of approximately $2.25 per share of common stock. Following
the issuance by the Company of warrants to purchase common stock in a private placement transaction in February 2016 and the issuance
by the Company of convertible notes in May and September 2016, as described below, the conversion rate of the 2015 144A Notes
was 446.6719 shares of Common Stock per $1,000 principal amount of 2015 144A Notes as of September 30, 2016. Furthermore, following
the issuance by the Company of additional convertible notes in October 2016, the conversion rate of the 2015 144A Notes is 446.8707
shares of Common Stock per $1,000 principal amount of 2015 144A Notes as of the date hereof. For any conversion on or after November
27, 2015, in addition to the shares deliverable upon conversion, noteholders will be entitled to receive a payment equal to the
present value of the remaining scheduled payments of interest that would have been made on the 2015 144A Notes being converted
from the conversion date to the earlier of the date that is three years after the date the Company receives such notice of conversion
and maturity (April 15, 2019), which will be computed using a discount rate of 0.75%. The Company may make such payment (the “Early
Conversion Payment”) either in cash or in common stock, at its election, provided that it may only make such payment in
common stock if such common stock is not subject to restrictions on transfer under the Securities Act by persons other than the
Company’s affiliates. If the Company elects to pay an Early Conversion Payment in common stock, then the stock will be valued
at 92.5% of the simple average of the daily volume-weighted average price per share for the 10 trading days ending on and including
the trading day immediately preceding the conversion date. Through September 30, 2016, the Company has elected to make each Early
Conversion Payment in shares of common stock. In the event of a fundamental change, as defined in the 2015 Indenture, holders
of the 2015 144A Notes may require the Company to purchase all or a portion of the 2015 144A Notes at a price equal to 100% of
the principal amount of the 2015 144A Notes, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase
date. In addition, holders of the 2015 144A Notes who convert their 2015 144A Notes in connection with a make-whole fundamental
change will, under certain circumstances, be entitled to an increase in the conversion rate. The issuance of shares of common
stock upon conversion of the 2015 144A Notes,
upon the Company’s election to pay interest on
the 2015 144A Notes in shares of common stock and upon the Company’s election to pay the Early Conversion Payment in shares
of common stock in an aggregate amount in excess of
38,415,626 shares of the Company’s common stock was subject to
stockholder approval, which was obtained on May 17, 2016. With exceptions for certain existing debt, refinancing of such debt
and certain other exclusions and waivers, the 2015 144A Notes provide that, as long as the aggregate outstanding principal amount
of the 2015 144A Notes exceeds $25.0 million, the Company's outstanding unsecured debt at any time cannot exceed $200.0 million
and its secured debt cannot exceed the greater of $65.0 million or 30% of its consolidated total assets.

23

2016 Convertible Note Offering

In May 2016, the Company entered into a securities
purchase agreement (or the “May 2016 Purchase Agreement”) between the Company and a private investor relating to the
sale of up to $15.0 million aggregate principal amount of convertible notes (or the “2016 Convertible Notes”) that
are convertible into shares of the Company’s common stock at an initial conversion price of $1.90 per share. The conversion
price will be subject to adjustment in the event of any stock split, reverse stock split, recapitalization, reorganization or similar
transaction. The May 2016 Purchase Agreement includes customary representations, warranties and covenants by the Company. The May
2016 Purchase Agreement also provides the purchaser with a right of first refusal with respect to any variable rate transaction
on the same terms and conditions as are offered to a third-party purchaser for as long as the purchaser holds any 2016 Convertible
Notes or shares of the Company’s common stock underlying the 2016 Convertible Notes.

Pursuant to the May 2016 Purchase Agreement,
the 2016 Convertible Notes were to be issued and sold in two separate closings. The initial closing occurred on May 10, 2016. At
the initial closing, the Company issued and sold a 2016 Convertible Note in a principal amount of $10.0 million to the purchaser,
resulting in net proceeds to the Company of approximately $9.9 million. The second closing was to occur on the first trading day
following the completion of the first three installment periods under the 2016 Convertible Notes and the satisfaction or waiver
of certain other closing conditions, including certain equity conditions, such as that no Triggering Event (as defined below) had
occurred. At the second closing, the Company was to issue and sell a 2016 Convertible Note in a principal amount of $5.0 million
to the purchaser, resulting in expected net proceeds to the Company of approximately $5.0 million. On September 2, 2016, in connection
with the Company and the purchaser waiving certain conditions to the second closing under the May 2016 Purchase Agreement, the
Company issued and sold an additional 2016 Convertible Note in the principal amount of $3.0 million to the purchaser, for proceeds
to the Company of approximately $3.0 million, and granted the purchaser the option to purchase a further 2016 Convertible Note
in the principal amount of $2.0 million (the “
$2 Million Note
”), representing the remaining 2016 Convertible
Notes provided for in the May 2016 Purchase Agreement, on or before December 31, 2016. On October 13, 2016, the Company issued
and sold the $2 Million Note to the purchaser for proceeds to the Company of $2.0 million. See Note 18, “Subsequent Events”
for additional details regarding the issuance of the $2 Million Note.

The 2016 Convertible Notes are general unsecured
obligations of the Company. Unless earlier converted or redeemed, the 2016 Convertible Notes will mature on the 18-month anniversary
of their respective issuance, subject to the rights of the holders to extend the maturity date in certain circumstances.

The 2016 Convertible Notes will be payable in monthly installments, in either cash at 118% of such installment
amount or, at the Company’s option, subject to the satisfaction of certain equity conditions, shares of common stock at a
discount to the then-current market price, subject to a price floor. In addition, in the event that the Company elects to pay all
or any portion of a monthly installment in common stock, the holders of the 2016 Convertible Notes shall have the right to require
that the Company repay in common stock an additional amount of the 2016 Convertible Notes not to exceed 50% of the cumulative sum
of the aggregate amounts by which the dollar-weighted trading volume of the Company’s common stock for all trading days during
the applicable installment period exceeds $200,000. The Company elected to make the June, July, August and September 2016 installment
payments on the 2016 Convertible Notes in shares of common stock.

The 2016 Convertible Notes contain customary
terms and covenants, including certain events of default after which the holders may require the Company to redeem all or any portion
of their 2016 Convertible Notes in cash at a price equal to the greater of (i) 118% of the amount being redeemed and (ii) the
intrinsic value of the shares of common stock issuable upon an installment payment of the amount being redeemed in shares.

In the event of a Fundamental Transaction (as
defined in the 2016 Convertible Notes), holders of the 2016 Convertible Notes may require the Company to redeem all or any portion
of their 2016 Convertible Notes at a price equal to the greater of (i) 118% of the amount being redeemed and (ii) the
intrinsic value of the shares of common stock issuable upon an installment payment of the amount being redeemed in shares.

24

The Company has the right to redeem the 2016
Convertible Notes for cash, in whole, at any time, or in part, from time to time, at a redemption price equal to 118% of the principal
amount of the 2016 Convertible Notes being redeemed. In addition, if the volume-weighted average price of the Company’s common
stock is (i) less than $1.00 for 30 consecutive trading days or (ii) less than $0.50 for five consecutive trading days (each, a
“Triggering Event”) within four months of the issuance of any 2016 Convertible Notes, the Company will have the option
to redeem such 2016 Convertible Notes in whole for cash at a redemption price equal to 112% of the principal amount of such 2016
Convertible Notes.

Related Party Convertible Notes

Total R&D Convertible Notes

In July 2012 and December 2013, the Company
entered into a series of agreements (or the "Total Fuel Agreements") with Total Energies Nouvelles Activités USA
(formerly known as Total Gas & Power USA, SAS, and referred to as “Total”) to establish a research and development
program (or the "Program") and form a joint venture (or the "Fuels JV") with Total to produce and commercialize
farnesene- or farnesane-based diesel and jet fuels, and established a convertible debt structure for the collaboration funding
from Total.

The purchase agreement for the notes related
to the funding from Total (or the “Total Purchase Agreement”) provided for the sale of an aggregate of $105.0 million
in 1.5% Senior Unsecured Convertible Notes due March 2017 (the “Unsecured R&D Notes”) as follows:

•

As part of an initial closing under the purchase agreement (which was completed in two installments),
(i) on July 30, 2012, the Company sold an Unsecured R&D Note with a principal amount of $38.3 million, including $15.0
million in new funds and $23.3 million in previously-provided diesel research and development funding by Total, and (ii) on September 14,
2012, the Company sold another Unsecured R&D Note for $15.0 million in new funds from Total. These Unsecured R&D Notes
had an initial conversion price of $7.0682 per share.

•

At a second closing under the Total Purchase Agreement (also completed in two installments) the
Company sold additional Unsecured R&D Notes for an aggregate of $30.0 million in new funds from Total ($10.0 million in June
2013 and $20.0 million in July 2013). These Unsecured R&D Notes had an initial conversion price of $3.08 per share, as described
below.

•

At a third closing under the Total Purchase Agreement (also completed in two installments) the
Company sold additional Unsecured R&D Notes for an aggregate of $21.7 million in new funds from Total ($10.85 million in July
2014 and $10.85 million in January 2015) (or the “Third Closing Notes”). These Unsecured R&D Notes had an initial
conversion price of $4.11 per share, as described below.

25

In March 2013, the Company entered into
a letter agreement with Total (or the March 2013 Letter Agreement) under which Total agreed to waive its right to cease its participation
in the parties' fuels collaboration at the July 2013 decision point and committed to proceed with the July 2013 funding tranche
of $30.0 million (subject to the Company's satisfaction of the relevant closing conditions for such funding in the Total Purchase
Agreement). As consideration for this waiver and commitment, the Company agreed to:

•

reduce the conversion price for the $30.0 million in principal amount of Unsecured R&D Notes
to be issued in connection with the second closing of the Unsecured R&D Notes (as described above) from $7.0682 per share to
a price per share equal to the greater of (i) the consolidated closing bid price of the Company's common stock on the date of the
March 2013 Letter Agreement, plus $0.01, and (ii) $3.08 per share, provided that the conversion price would not be reduced by more
than the maximum possible amount permitted under the rules of The NASDAQ Stock Market (or “NASDAQ”) such that the new
conversion price would require the Company to obtain stockholder consent; and

•

grant Total a senior security interest in the Company's intellectual property, subject to certain
exclusions and subject to release by Total when the Company and Total enter into final documentation regarding the establishment
of the Fuels JV.

In addition to the waiver by Total described
above, Total also agreed that, at the Company's request and contingent upon the Company meeting its obligations described above,
it would pay advance installments of the amounts otherwise payable at the second closing.

In June 2013, the Company sold and issued
$10.0 million in principal amount of Unsecured R&D Notes to Total pursuant to the second closing of the Unsecured R&D Notes
as discussed above. In accordance with the March 2013 Letter Agreement, this Unsecured R&D Note had an initial conversion price
equal to $3.08 per share of the Company's common stock.

In July 2013, the Company sold and issued
$20.0 million in principal amount of Unsecured R&D Notes to Total pursuant to the Total second closing of the Unsecured R&D
Notes as discussed above. This purchase and sale completed Total's commitment to purchase $30.0 million of the Unsecured R&D
Notes in the second closing by July 2013. In accordance with the March 2013 Letter Agreement, this Unsecured R&D Note has an
initial conversion price equal to $3.08 per share of the Company's common stock.

In December 2013, in connection with the Company's entry into a Shareholders Agreement dated December 2,
2013 and License Agreement dated December 2, 2013 (or, collectively, the “JV Documents”) with Total and Total Amyris
BioSolutions B.V. (or “TAB”) relating to the establishment of TAB (see Note 7, "Joint Ventures and Noncontrolling
Interest"), the Company (i) exchanged the $69.0 million of the then-outstanding Unsecured R&D Notes issued pursuant to
the Total Purchase Agreement for replacement 1.5% Senior Secured Convertible Notes due March 2017 (or the “Secured R&D
Notes”, and together with the Unsecured R&D Notes, the “R&D Notes”), in principal amounts equal to the
principal amount of each cancelled note and with substantially similar terms except that such replacement notes were secured, (ii)
granted to Total a security interest in and lien on all Amyris’ rights, title and interest in and to Company’s shares
in the capital of TAB and (iii) agreed that any securities to be purchased and sold at the third closing under the Total Purchase
Agreement by Total would be Secured R&D Notes instead of Unsecured R&D Notes. As a consequence of executing the JV Documents
and forming TAB, the security interest in all of the Company's intellectual property, granted by the Company in favor of Total,
Temasek, and certain Fidelity Entities pursuant to the Restated Intellectual Property Security Agreement dated as of October 16,
2013, were automatically terminated effective as of December 2, 2013 upon Total’s and the Company’s joint written notice
to Temasek and the Fidelity Entities.

In April 2014, the Company and Total entered
into a letter agreement dated as of March 29, 2014 (or the “March 2014 Total Letter Agreement”) to amend the Amended
and Restated Master Framework Agreement entered into as of December 2, 2013 (included as part of JV Documents) and the Total Purchase
Agreement. Under the March 2014 Total Letter Agreement, the Company agreed to, (i) amend the conversion price of the Secured R&D
Notes to be issued in the third closing under the Total Purchase Agreement from $7.0682 per share to $4.11 per share subject to
stockholder approval at the Company's 2014 annual meeting (which was obtained in May 2014), (ii) extend the period during which
Total may exchange for other Company securities Secured R&D Notes issued under the Total Fuel Agreements from June 30, 2014
to the later of December 31, 2014 and the date on which the Company shall have raised $75.0 million of equity and/or convertible
debt financing (excluding any convertible promissory notes issued pursuant to the Total Purchase Agreement), (iii) eliminate the
Company’s ability to qualify, in a disclosure letter to Total, certain of the representations and warranties that the Company
must make at the closing of any third closing sale, and (iv) beginning on March 31, 2014, provide Total with monthly reporting
on the Company’s cash, cash equivalents and short-term investments. In consideration of these agreements, Total agreed to
waive its right not to consummate the closing of the issuance of the Third Closing Notes if it had decided not to proceed with
the collaboration and had made a "No-Go" decision with respect thereto.

26

In July 2014, the Company sold and issued a Secured R&D Note to Total with a principal amount of
$10.85 million with a March 1, 2017 maturity date pursuant to the Total Purchase Agreement. This purchase and sale constituted
the initial installment of the $21.7 million third closing described above. In accordance with the March 2014 Total Letter Agreement,
this Secured R&D Note had an initial conversion price equal to $4.11 per share of the Company's common stock.

In January 2015, the Company sold and issued a Secured R&D Note to Total with a principal amount of $10.85
million with a March 1, 2017 maturity date pursuant to the Total Purchase Agreement. This purchase and sale constituted the
final installment of the $21.7 million third closing described above. In accordance with the March 2014 Total Letter Agreement,
this Secured R&D Note had an initial conversion price equal to $4.11 per share of the Company's common stock.

In July 2015, Total exchanged all but $5.0 million of R&D Notes then held by Total, such cancelled notes
having an aggregate principal amount of $70 million, in exchange for approximately 30.4 million shares of the Company’s common
stock in connection with the Exchange. Refer to the “Exchange” section of this Note 5, "Debt", for additional
details of the impact of the Exchange on the R&D Notes.

In March 2016, in connection with the restructuring
of the Fuels JV (see Note 7, "Joint Ventures and Noncontrolling Interest"), the Company sold to Total one half of the
Company’s ownership stake in the Fuels JV (giving Total an aggregate ownership stake of 75% of the Fuels JV and giving the
Company an aggregate ownership stake of 25% of the Fuels JV) in exchange for Total cancelling (i) approximately $1.3 million of
R&D Notes, plus all paid-in-kind and accrued interest under all outstanding R&D Notes ($2.8 million, including all such
interest that was outstanding as of July 29, 2015) and (ii) a note in the principal amount of Euro 50,000, plus accrued interest,
issued to Total in connection with the original capitalization of the Fuels JV. To satisfy its purchase obligation above, Total
surrendered to the Company the remaining R&D Note of approximately $5.0 million in principal amount, and the Company executed
and delivered to Total a new, Unsecured R&D Note in the principal amount of $3.7 million. The disposal of the 25% ownership
stake in the Fuels JV resulted in a gain to the Company of $4.2 million, which was recognized as a capital contribution from Total
within equity.

As of September 30, 2016 and December 31,
2015, $3.7 million and $5.0 million, respectively, of R&D Notes were outstanding, net of debt discount of $0.0 million and
$0.0 million, respectively. The R&D Notes have a maturity date of March 1, 2017, an initial conversion price equal to
$3.08 per share for the Unsecured R&D Notes, subject to certain adjustments as described below. The R&D Notes bear interest
of 1.5% per annum (with a default rate of 2.5%), accruing from the date of issuance and payable at maturity or on conversion or
a change of control where Total exercises the right to require the Company to repay the notes, as described below.

The R&D Notes become convertible into the
Company's common stock (i) within 10 trading days prior to maturity, (ii) on a change of control of the Company, and (iii) on a
default by the Company. The conversion price of the R&D Notes are subject to adjustment for proportional adjustments to outstanding
common stock and under anti-dilution provisions in case of certain dividends and distributions. Total has a right to require repayment
of 101% of the principal amount of the R&D Notes in the event of a change of control of the Company and the R&D Notes provide
for payment of unpaid future interest through the maturity date on conversion following such a change of control if Total does
not require such repayment. The Total Purchase Agreement and Unsecured R&D Notes include covenants regarding payment of interest,
maintenance of the Company's listing status, limitations on debt, maintenance of corporate existence, and filing of SEC reports.
The R&D Notes include standard events of default resulting in acceleration of indebtedness, including failure to pay, bankruptcy
and insolvency, cross-defaults, and breaches of the covenants in the Total Purchase Agreement and R&D Notes, with added default
interest rates and associated cure periods applicable to the covenant regarding SEC reporting. Furthermore, with exceptions for
certain existing debt, refinancing of such debt and certain other exclusions and waivers, the R&D Notes provided that the Company's
total outstanding debt at any time may not exceed the greater of $200.0 million or 50% of its consolidated total assets and its
secured debt may not exceed the greater of $125.0 million or 30% of its consolidated total assets.

27

August 2013 Financing Convertible Notes and
Temasek Bridge Note

In connection with the August 2013 Financing, the Company entered into the August 2013 Share Purchase
Agreement with Total and Temasek to sell up to $73.0 million in convertible promissory notes in private placements, with such notes
to be sold and issued over a period of up to 24 months from the date of signing. The August 2013 SPA provided for the August 2013
Financing to be divided into two tranches (the first tranche for $42.6 million and the second tranche for $30.4 million), each
with differing closing conditions. Of the total possible purchase price in the financing, $25.0 million was paid in the form of
cash by Temasek ($25.0 million in the second tranche), $35.0 million was paid by the exchange and cancellation of the Temasek Bridge
Note, as described below, and $13.0 million was paid by the exchange and cancellation of outstanding R&D Notes held by Total
in connection with its exercise of pro rata rights ($7.6 million in the first tranche and $5.4 million in the second tranche).
The August 2013 SPA included requirements that the Company meet certain production milestones before the second tranche would become
available, obtain stockholder approval prior to completing any closing of the transaction, and issue a warrant to Temasek to purchase
1,000,000 shares of the Company's common stock at an exercise price of $0.01 per share, exercisable only if Total converts R&D
Notes previously issued to Total in the second closing under the Total Purchase Agreement. In September 2013, prior to the initial
closing of the August 2013 Financing, the Company's stockholders approved the issuance in the private placement of up to $110.0
million aggregate principal amount of senior convertible promissory notes, the issuance of a warrant to purchase 1,000,000 shares
of the Company's common stock and the issuance of the common stock issuable upon conversion or exercise of such notes and warrant,
which approval included the transactions contemplated by the August 2013 Financing.

In October 2013, the Company sold and issued a senior secured promissory note to Temasek (or the “Temasek
Bridge Note”) in exchange for a bridge loan of $35.0 million. The Temasek Bridge Note was due on February 2, 2014 and accrued
interest at a rate of 5.5% quarterly from the October 4, 2013 date of issuance. The Temasek Bridge Note was cancelled on October
16, 2013 as payment for Temasek’s purchase of Tranche I Notes in the first tranche of the August 2013 Financing, as further
described below.

In October 2013, the Company amended the August 2013 SPA to include the investment by the Fidelity Entities
in the first tranche of the August 2013 Financing of $7.6 million, and to proportionally increase the amount of first tranche notes
acquired by exchange and cancellation of outstanding R&D Notes held by Total in connection with its exercise of pro rata rights
up to $9.2 million in the first tranche. Also in October 2013, the Company completed the closing of the first tranche of the August
2013 Financing, issuing a total of $51.8 million in Tranche I Notes for cash proceeds of $7.6 million and cancellation of outstanding
convertible promissory notes of $44.2 million, of which $35.0 million resulted from cancellation of the Temasek Bridge Note and
the remaining $9.2 million from the exchange and cancellation of an outstanding R&D Note held by Total. As a result of the
exchange and cancellation of the $35.0 million Temasek Bridge Note and the $9.2 million R&D Note held by Total for the Tranche
I Notes, the Company recorded a loss from extinguishment of debt of $19.9 million. The Tranche I Notes are due sixty months from
the date of issuance and were initially convertible into the Company’s common stock at a conversion price equal to $2.44,
which represents a 15% discount to a trailing 60-day weighted-average closing price of the common stock on The NASDAQ Stock Market
(or “NASDAQ”) through August 7, 2013, subject to certain adjustments, as described below. The Tranche I Notes are convertible
at the option of the holder: (i) at any time after 18 months from the date of the August 2013 SPA, (ii) on a change of control
of the Company and (iii) upon the occurrence of an event of default. Each Tranche I Note accrues interest from the date of issuance
until the earlier of the date that such Tranche I Note is converted into the Company’s common stock or is repaid in full.
Interest accrues at a rate of 5% per six months, compounded semiannually (with graduated interest rates of 6.5% applicable to the
first 180 days and 8% applicable thereafter as the sole remedy should the Company fail to maintain NASDAQ listing status or at
6.5% for all other defaults). Interest for the first 30 months is payable in kind and added to the principal every six months and
thereafter, the Company may continue to pay interest in kind by adding to the principal every six months or may elect to pay interest
in cash. Through September 30, 2016, the Company has elected to pay interest on the Tranche I Notes in kind. The Tranche I Notes
may be prepaid by the Company on the 30-month anniversary of the issuance date, and thereafter every six months at the date of
payment of the semi-annual coupon.

28

In January 2014, the Company sold and issued, for face value, approximately $34.0 million of convertible
promissory notes in the second tranche of the August 2013 Financing (or the “Tranche II Notes”). At the closing, Temasek
purchased $25.0 million of the Tranche II Notes and funds affiliated with Wolverine Asset Management, LLC purchased $3.0 million
of the Tranche II Notes, each for cash. Total purchased approximately $6.0 million of the Tranche II Notes through cancellation
of the same amount of principal of previously outstanding R&D Notes held by Total. As a result of the exchange and cancellation
of the $6.0 million R&D Note held by Total for the Tranche II Notes, the Company recorded a loss from extinguishment of debt
of $9.4 million. The Tranche II Notes will be due sixty months from the date of issuance and were initially convertible into shares
of common stock at a conversion price equal to $2.87 per share, which represents a trailing 60-day weighted-average closing price
of the common stock on NASDAQ through August 7, 2013, subject to certain adjustments, as described below. Specifically, the Tranche
II Notes are convertible at the option of the holder (i) at any time 12 months after issuance, (ii) on a change of control of the
Company, and (iii) upon the occurrence of an event of default. Each Tranche II Note will accrue interest from the date of issuance
until the earlier of the date that such Tranche II Note is converted into common stock or repaid in full. Interest will accrue
at a rate per annum equal to 10%, compounded annually (with graduated interest rates of 13% applicable to the first 180 days and
16% applicable thereafter as the sole remedy should the Company fail to maintain NASDAQ listing status or at 12% for all other
defaults). Interest for the first 36 months shall be payable in kind and added to principal every year following the issue date
and thereafter, the Company may continue to pay interest in kind by adding to principal on every year anniversary of the issue
date or may elect to pay interest in cash. Through September 30, 2016, the Company has elected to pay interest on the Tranche II
Notes in kind.

The conversion prices of the Tranche I Notes
and Tranche II Notes are subject to adjustment (i) according to proportional adjustments to outstanding common stock of the Company
in case of certain dividends and distributions, (ii) according to anti-dilution provisions, and (iii) with respect to notes held
by any purchaser other than Total, in the event that Total exchanges existing convertible notes for new securities of the Company
in connection with future financing transactions in excess of its pro rata amount. Notwithstanding the foregoing, holders of a
majority of the principal amount of the notes outstanding at the time of conversion may waive any anti-dilution adjustments to
the conversion price. The purchasers have a right to require repayment of 101% of the principal amount of the notes in the event
of a change of control of the Company and the notes provide for payment of unpaid interest on conversion following such a change
of control if the purchasers do not require such repayment. The August 2013 SPA, Tranche I Notes and Tranche II Notes include covenants
regarding payment of interest, maintenance of the Company’s listing status, limitations on debt and on certain liens, maintenance
of corporate existence, and filing of SEC reports. The Tranche Notes include standard events of default including failure to pay,
bankruptcy and insolvency, cross-defaults, and breaches of the covenants in the August 2013 SPA, Tranche I Notes and Tranche II
Notes, after which the Tranche Notes may be due and payable immediately, as well as associated with default interest rates as set
forth above.

In July 2015, Temasek exchanged all of the Tranche I and Tranche II Notes then held by Temasek, such notes
having an aggregate principal amount of approximately $71.0 million, in exchange for approximately 30.86 million shares of the
Company’s common stock in connection with the Exchange. Refer to the “Exchange” section of this Note 5, "Debt",
for additional details of the impact of the Exchange on the R&D Notes.

The conversion price of the Tranche I Notes
and Tranche II Notes was reduced to $1.42 per share upon the completion of a private placement of common stock and warrants to
purchase common stock in July 2015, as described below. Following the issuance by the Company of warrants to purchase common
stock in a private placement transaction in February 2016, as described below, the conversion price of the Tranche I Notes and
Tranche II Notes was further adjusted to $1.40 per share, and following the sale by the Company of shares of common stock to the
Bill & Melinda Gates Foundation in May 2016, as described below, the conversion price of the Tranche I Notes and Tranche
II Notes was further adjusted to $1.14 per share.

As of September 30, 2016 and December 31,
2015, the related party convertible notes outstanding under the Tranche I Notes and Tranche II Notes were $21.7 million and $23.3
million, respectively, net of debt discount of $0.0 million and $0.0 million, respectively. Refer to the “Exchange”
and “Maturity Treatment Agreement” sections of this Note 5, "Debt", for details of the impact of the Maturity
Treatment and Exchange agreements on the Tranche I and II Notes.

29

2014 144A Notes Sold to Related Parties

As of September 30, 2016 and December 31, 2015, the related party convertible notes outstanding under
the 2014 Rule 144A Convertible Note Offering were $15.3 million and $14.6 million, respectively, net of discount and issuance costs
of $2.4 million and $1.6 million, respectively.

As of September 30, 2016 and December 31, 2015, the total related party convertible notes outstanding
were $40.6 million and $42.8 million, respectively, net of discount and issuance costs of $2.6 million and $1.9 million, respectively.

Loans Payable

In July 2012, the Company entered into a Note
of Bank Credit and a Fiduciary Conveyance of Movable Goods Agreement (together, the "July 2012 Bank Agreements") with
each of Nossa Caixa Desenvolvimento (or “Nossa Caixa”) and Banco Pine S.A. (or “Banco Pine”). Under the
July 2012 Bank Agreements, the Company pledged certain farnesene production assets as collateral for the loans of R$52.0 million.
The Company's total acquisition cost for such pledged assets was approximately R$68.0 million (approximately US$20.9 million based
on the exchange rate as of September 30, 2016). The Company is also a parent guarantor for the payment of the outstanding
balance under these loan agreements. Under the July 2012 Bank Agreements, the Company could borrow an aggregate of R$52.0 million
(approximately US$16.0 million based on the exchange rate as of September 30, 2016) as financing for capital expenditures
relating to the Company's manufacturing facility located in Brotas, Brazil. Specifically, Banco Pine, agreed to lend R$22.0
million and Nossa Caixa agreed to lend R$30.0 million. The funds for the loans are provided by BNDES, but are guaranteed by
the lenders. The loans have a final maturity date of July 15, 2022 and bear a fixed interest rate of 5.5% per year. The
loans are also subject to early maturity and delinquency charges upon occurrence of certain events including interruption of manufacturing
activities at the Company's manufacturing facility in Brotas, Brazil for more than 30 days, except during the sugarcane off-season.
For the first two years that the loans are outstanding, the Company is required to pay interest only on a quarterly basis. Since
August 15, 2014, the Company has been required to pay equal monthly installments of both principal and interest for the remainder
of the term of the loans. As of September 30, 2016 and December 31, 2015, a principal amount of R$37.9 million (approximately
US$11.7 million based on the exchange rate as of September 30, 2016) and R$43.0 million (approximately US$11.0 million based on
the exchange rate as of December 30, 2015), respectively, was outstanding under these loan agreements.

In March 2014, the Company entered into
an export financing agreement with Banco ABC Brasil S.A. (or “ABC”) for approximately $2.2 million to fund exports
through March 2015. This loan is collateralized by future exports from the Company's subsidiary in Brazil. In April, 2015, we entered
into an additional export financing agreement with ABC for approximately $1.6 million to fund exports through March 2016. This
loan is collateralized by future exports from the Company's subsidiary in Brazil. As of September 30, 2016, the aggregate principal
amount outstanding under the ABC financing agreements was zero ($1.6 million at December 31, 2015). The Company was also a parent
guarantor for the payment of the outstanding balance under these loan agreements.

Exchange (debt conversion)

On July 29, 2015, the Company closed the "Exchange"
pursuant to that certain Exchange Agreement, dated as of July 26, 2015 (or the “Exchange Agreement”), among the Company,
Temasek and Total.

Under the Exchange Agreement, at the closing,
Temasek exchanged $71.0 million in principal amount of outstanding Tranche I and Tranche II Notes (including paid-in-kind and accrued
interest through July 29, 2015) and Total exchanged $70.0 million in principal amount of outstanding R&D Notes for shares of
the Company’s common stock. The exchange price was $2.30 per share (the “Exchange Price”) and was paid by the
exchange and cancellation of such outstanding convertible promissory notes, and Temasek and Total received 30,860,633 and 30,434,782
shares of the Company’s common stock, respectively, in the Exchange. As a result of the Exchange, accretion of debt discount
was accelerated based on the Company’s estimate of the expected conversion date, resulting in an additional interest expense
of $39.2 million for the year ended December 31, 2015.

30

Under the Exchange Agreement, Total also received at the closing the following warrants, each with a five-year
term:

•

A warrant to purchase 18,924,191 shares of the Company’s Common Stock (or the “Total Funding Warrant”).

•

A warrant to purchase 2,000,000 shares of the Company’s common stock that will only be exercisable
if the Company fails, as of March 1, 2017, to achieve a target cost per liter to manufacture farnesene (or the “Total R&D
Warrant”). The Total Funding Warrant and the Total R&D Warrant are collectively referred to as the “Total Warrants.”

Additionally, under the Exchange Agreement,
Temasek received the following warrants:

•

A warrant to purchase 14,677,861 shares of the Company’s common stock. (the “Temasek Exchange Warrant”).

•

A warrant exercisable for that number of shares of the Company’s common stock equal to (1)
(A) the number of shares for which Total exercises the Total Funding Warrant plus (B) the number of additional shares for which
the certain convertible notes remaining outstanding following the completion of the Exchange may become exercisable as a result
of a reduction in the conversion price of such remaining notes as of a result of and/or subsequent to the date of the Exchange
plus (C) that number of additional shares in excess of 2,000,000, if any, for which the Total R&D Warrant becomes exercisable
multiplied by a fraction equal to 30.6% divided by 69.4% plus (2) (A) the number of any additional shares for which certain other
outstanding convertible promissory notes may become exercisable as a result of a reduction to the conversion price of such notes
multiplied by (B) a fraction equal to 13.3% divided by 86.7% (or the “Temasek Funding Warrant”).

•

A warrant exercisable for that number of shares of the Company’s common stock equal to 880,339
multiplied by a fraction equal to the number of shares for which Total exercises the Total R&D Warrant divided by 2,000,000.
If Total is entitled to, and does, exercise the Total R&D Warrant in full, this warrant would be exercisable for 880,339 shares
(or the “Temasek R&D Warrant”).

The Temasek Exchange Warrant, the Temasek Funding
Warrant and the Temasek R&D Warrant each have ten-year terms and are referred to herein as the “Temasek Warrants”
and, the Temasek Warrants and Total Warrants are hereinafter collectively referred to as the “Exchange Warrants”. All
of the Exchange Warrants have an exercise price of $0.01 per share.

In addition to the grant of the Exchange Warrants,
a warrant issued by the Company to Temasek in October 2013 in conjunction with a prior convertible debt financing (the “2013
Warrant”) became exercisable in full upon the completion of the Exchange. There were 1,000,000 shares underlying the 2013
Warrant, with an exercise price of $0.01 per share.

The exercisability of all of the Exchange Warrants
was subject to stockholder approval, which was obtained on September 17, 2015.

In February and May 2016, as a result of the
adjustments to the Tranche I and Tranche II Notes conversion prices discussed above under “Related Party Convertible Notes”,
the Temasek Funding Warrant became exercisable for an additional 127,194 and 2,335,342 shares of common stock, respectively.

As of September 30, 2016, the Total Funding Warrant, the Temasek Exchange Warrant, and the 2013 Warrant had
been fully exercised and Temasek had exercised the Temasek Funding Warrant with respect to 12,700,244 shares of common stock. Neither
the Total R&D Warrant nor the Temasek R&D Warrant were exercisable as of September 30, 2016. Warrants to purchase 2,462,536
shares of common stock under the Temasek Funding Warrant were unexercised as of September 30, 2016.

31

Maturity Treatment Agreement

At the closing of the Exchange, the Company,
Total and Temasek also entered into a Maturity Treatment Agreement, dated as of July 29, 2015, pursuant to which Total and Temasek
agreed to convert any Tranche I Notes, Tranche II Notes or 2014 144A Notes held by them that were not cancelled in the Exchange
(the “Remaining Notes”) into shares of the Company’s common stock in accordance with the terms of such Remaining
Notes upon maturity, provided that certain events of default have not occurred with respect to the applicable Remaining Notes prior
to such maturity. As of immediately following the closing of the Exchange, Temasek held $10.0 million in aggregate principal amount
of Remaining Notes (consisting of 2014 144A Notes) and Total held approximately $25.0 million in aggregate principal amount of
Remaining Notes (consisting of $9.7 million of 2014 144A Notes and $15.3 million of Tranche I and II Notes).

February 2016 Private Placement

On February 12, 2016, the Company entered into a Note and Warrant Purchase Agreement (the “February
2016 Purchase Agreement”) with the purchasers named therein for the sale of $18.0 million in aggregate principal amount of
unsecured promissory notes (or the “February 2016 Notes”) to the purchasers, as well as warrants to purchase 2,571,428
shares of the Company’s common stock at an exercise price of $0.01 per share, representing aggregate proceeds to the Company
of $18 million (the “Initial Sale”). On February 15, 2016, an additional purchaser joined the Purchase Agreement and
purchased $2.0 million in aggregate principal amount of the February 2016 Notes, as well as warrants to purchase 285,714 shares
of the Company’s common stock at an exercise price of $0.01 per share, representing aggregate proceeds to the Company of
$2 million (or the “Subsequent Sale” and together with the Initial Sale, the “February 2016 Private Placement”).
The February 2016 Notes and the warrants were issued in a private placement pursuant to the exemption from registration under Section
4(2) of the Securities Act and Regulation D promulgated under the Securities Act. The purchasers are existing stockholders of the
Company and affiliated with certain members of the Company’s Board of Directors: Foris Ventures, LLC (an entity affiliated
with director John Doerr of Kleiner Perkins Caufield & Byers, a current stockholder), which purchased $16.0 million aggregate
principal amount of the Notes and warrants to purchase 2,285,714 shares of the Company’s common stock; Naxyris S.A. (an investment
vehicle owned by Naxos Capital Partners SCA Sicar; director Carole Piwnica is Director of NAXOS UK, which is affiliated with Naxos
Capital Partners SCA Sicar), which purchased $2.0 million aggregate principal amount of the Notes and warrants to purchase 285,714
shares of the Company’s common stock; and Biolding Investment SA, a fund affiliated with director HH Sheikh Abdullah bin
Khalifa Al Thani, which purchased $2.0 million aggregate principal amount of the Notes and warrants to purchase 285,714 shares
of the Company’s common stock. The Initial Sale closed on February 12, 2016, and the Subsequent Sale closed on February 15,
2016.

The February 2016 Notes are unsecured obligations
of the Company and are subordinate to the Company’s obligations under the Senior Secured Loan Facility pursuant to a Subordination
Agreement, dated as of February 12, 2016, by and among the Company, the purchasers and the administrative agent under the Senior
Secured Loan Facility. Interest will accrue on the February 2016 Notes from and including, with respect to the Initial Sale, February
12, 2016, and with respect to the Subsequent Sale, February 15, 2016, at a rate of 13.50% per annum and is payable on May 15, 2017,
the maturity date of the February 2016 Notes, unless the February 2016 Notes are prepaid in accordance with their terms prior to
such date. The February 2016 Purchase Agreement and the February 2016 Notes contain customary terms, provisions, representations
and warranties, including certain events of default after which the February 2016 Notes may be due and payable immediately, as
set forth in the February 2016 Notes.

The exercisability of the warrants issued in the February 2016 Private Placement, which each have a term of
five years, was subject to stockholder approval, which was obtained on May 17, 2016. As of September 30, 2016, the carrying amount
of the February 2016 Notes was $17.8 million.

June 2016 Private Placement

On June 24, 2016, the Company entered into a Note Purchase Agreement (or the “June 2016 Purchase Agreement”)
with Foris Ventures, LLC for the sale of $5.0 million in aggregate principal amount of secured promissory notes (or the “June
2016 Notes”) to Foris Ventures, LLC in exchange for aggregate proceeds to the Company of $5.0 million (or the “June
2016 Private Placement”). The June 2016 Notes were issued in a private placement pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended and Regulation D promulgated under the Securities Act. The June 2016
Private Placement closed on June 24, 2016.

32

The June 2016 Notes are collateralized by a
second priority lien on the assets securing the Company’s obligations under the Senior Secured Loan Facility, and are subordinate
to the Company’s obligations under the Senior Secured Loan Facility pursuant to a Subordination Agreement, dated as of June
24, 2016, by and among the Company, Foris Ventures, LLC and the administrative agent under the Company’s Senior Secured Loan
Facility. Interest will accrue on the June 2016 Notes from and including June 24, 2016 at a rate of 13.50% per annum and is payable
in full on May 15, 2017, the maturity date of the June 2016 Notes, unless the June 2016 Notes are prepaid in accordance with their
terms prior to such date. The June 2016 Purchase Agreement and the June 2016 Notes contain customary terms, provisions, representations
and warranties, including certain events of default after which the June 2016 Notes may be due and payable immediately, as set
forth in the June 2016 Notes.

In June 2012, the Company entered into a letter
of credit agreement for $1.0 million under which it provided a letter of credit to the landlord of its headquarters in Emeryville,
California, in order to cover the security deposit on the lease. This letter of credit is secured by a certificate of deposit.
Accordingly, the Company has $1.0 million as restricted cash under this arrangement as of September 30, 2016 and December 31,
2015.

Future minimum payments under the debt agreements
as of September 30, 2016 are as follows (in thousands):

Years ending December 31:

Related Party
Convertible
Debt

Convertible
Debt

Loans
Payable

Related
Party Loans
payable

Credit
Facility

Total

2016 (remaining three months)

$

312

$

3,240

$

1,770

$

844

$

33,234

$

39,400

2017

4,837

23,562

2,870

26,257

1,551

59,077

2018

13,937

17,736

2,450

—

322

34,445

2019

26,080

79,937

2,342

—

78

108,437

2020

—

—

2,234

—

—

2,234

Thereafter

—

—

3,314

—

—

3,314

Total future minimum payments

45,166

124,475

14,980

27,101

35,185

246,907

Less: amount representing interest
(1)

(4,555

)

(55,942

)

(2,026

)

(4,254

(4,499

)

(71,276

)

Present value of minimum debt payments

40,611

68,533

12,954

22,847

30,686

175,631

Less: current portion present value of minimum debt payments

(3,611

)

(15,357

)

(3,275

)

(22,847

(29,926

)

(75,016

)

Noncurrent portion of debt

$

37,000

$

53,176

$

9,679

$

—

$

760

$

100,615

______________

(1) Including debt discount
of $33.0 million related to the embedded derivatives associated with the related party and non-related party debt which will be
accreted to interest expense under the effective interest method over the term of the debt and debt issuance costs of $3.0 million.

In the quarter ended March 31, 2016, the Company
adopted ASU 2015-03,
Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs
, which requires
debt issuance costs previously reported as a deferred charge within other noncurrent assets and prepaid expenses and other current
assets to be presented as a direct reduction from the carrying amount of debt, consistent with debt discounts, applied retrospectively
for all periods presented. As of December 31, 2015, this resulted in the reduction of noncurrent debt by $2.8 million, current
debt by $1.4 million, other noncurrent assets by $2.8 million and prepaid expenses and other current assets by $1.4 million.

33

6. Commitments and Contingencies

Lease Obligations

The Company leases certain facilities and finances
certain equipment under operating and capital leases, respectively. Operating leases include leased facilities and capital leases
include leased equipment (see Note 4, "Balance Sheet Components"). The Company recognizes rent expense on a straight-line
basis over the non-cancellable lease term and records the difference between rent payments and the recognition of rent expense
as a deferred rent liability. Where leases contain escalation clauses, rent abatements, and/or concessions, such as rent holidays
and landlord or tenant incentives or allowances, the Company applies them as a straight-line rent expense over the lease term.
The Company has non-cancellable operating lease agreements for office, research and development, and manufacturing space that expire
at various dates, with the latest expiration in February 2031. Rent expense under operating leases was $1.3 million and $1.4 million
for the three months ended September 30, 2016 and 2015, respectively, and was $4.0 million and $3.9 million for the nine months
ended September 30, 2016 and 2015, respectively.

Future minimum payments under the Company's lease obligations as
of September 30, 2016, are as follows (in thousands):

Years ending December 31:

Capital
Leases

Operating
Leases

Total Lease
Obligations

2016 (remaining three months)

$

471

$

1,762

$

2,233

2017

525

6,888

7,413

2018

28

6,890

6,918

2019

—

6,777

6,777

2020

—

7,008

7,008

Thereafter

—

18,210

18,210

Total future minimum lease payments

1,024

$

47,535

$

48,559

Less: amount representing interest

(26

)

Present value of minimum lease payments

998

Less: current portion

(942

)

Long-term portion

$

56

Guarantor Arrangements

The Company has agreements whereby it indemnifies
its officers and directors for certain events or occurrences while the officer or directors are serving in their official capacities.
The indemnification period remains enforceable for the officer's or director’s lifetime. The maximum potential amount of
future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company
has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any future
payments. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification
agreements is minimal. Accordingly, the Company had no liabilities recorded for these agreements as of September 30, 2016
and December 31, 2015.

The Company entered into the FINEP Credit Facility
to finance a research and development project on sugarcane-based biodiesel (see Note 5, "Debt"). The FINEP Credit Facility
is guaranteed by a chattel mortgage on certain equipment of the Company. The Company's total acquisition cost for the equipment
under this guarantee is approximately R$6.0 million (approximately US$1.8 million based on the exchange rate as of September 30,
2016).

34

The Company entered into the BNDES Credit Facility
to finance a production site in Brazil (see Note 5, "Debt").The BNDES Credit Facility is collateralized by a first priority
security interest in certain of the Company's equipment and other tangible assets with a total acquisition cost of R$24.9 million
(approximately US$7.7 million based on the exchange rate as of September 30, 2016). The Company is a parent guarantor for
the payment of the outstanding balance under the BNDES Credit Facility. Additionally, the Company is required to provide certain
bank guarantees under the BNDES Credit Facility.

The Company entered into loan agreements and
security agreements whereby the Company pledged certain farnesene production assets as collateral (the fiduciary conveyance of
movable goods) with each of Nossa Caixa and Banco Pine (see Note 5, "Debt"). The Company's total acquisition cost for
the farnesene production assets pledged as collateral under these agreements is approximately R$68.0 million (approximately US$20.9
million based on the exchange rate as of September 30, 2016). The Company is also a parent guarantor for the payment of the
outstanding balance under these loan agreements.

The Company had an export financing agreement
with Banco ABC Brasil S.A for approximately $2.2 million for a one year term to fund exports through March 2015. As of September 30,
2016, the loan was fully repaid. On April 8, 2015, the Company entered into another export financing agreement with the same bank
for approximately $1.6 million for a one year term to fund exports through March 2016. The loan was fully repaid as of September
30, 2016. This loan is collateralized by future exports from Amyris Brasil. The Company is also a parent guarantor for the payment
of the outstanding balance under these loan agreements.

In October 2013, the Company entered into a
letter agreement with Total relating to the Temasek Bridge Note and to the closing of the August 2013 Financing (or the "Amendment
Agreement") (see Note 5, "Debt"). In the August 2013 Financing, the Company was required to provide the purchasers
under the August 2013 SPA with a security interest in the Company’s intellectual property if Total still held such security
interest as of the initial closing of the August 2013 Financing. Under the terms of a previous Intellectual Property Security Agreement
by and between the Company and Total (or the "Security Agreement"), the Company had previously granted a security interest
in favor of Total to secure the obligations of the Company under the R&D Notes issued and issuable to Total under the Total
Purchase Agreement. The Security Agreement provided that such security interest would terminate if Total and the Company entered
into certain agreements relating to the formation of the Fuels JV. In connection with Total’s agreement to (i) permit the
Company to grant the security interest under the Temasek Bridge Note and the August 2013 Financing and (ii) waive a secured debt
limitation contained in the outstanding R&D Notes issued pursuant to the Total Purchase Agreement and held by Total, the Company
entered into the Amendment Agreement. Under the Amendment Agreement, the Company agreed to reduce, effective December 2, 2013,
the conversion price for the R&D Notes issued in 2012 from $7.0682 per share to $2.20, the market price per share of the Company’s
common stock as of the signing of the Amendment Agreement, as determined in accordance with applicable NASDAQ rules, unless the
Company and Total entered into the JV Documents on or prior to December 2, 2013. The Company and Total entered into the JV agreements
on December 2, 2013 and the Amendment Agreement and all security interests thereunder were automatically terminated and the conversion
price of such R&D Notes remained at $7.0682 per share.

In December 2013, in connection with the
execution of JV Documents entered into by and among Amyris, Total and TAB relating to the establishment of TAB (see Note 5, "Debt"
and Note 7, "Joint Venture and Noncontrolling Interests"), the Company agreed to exchange the $69.0 million outstanding
R&D Notes issued pursuant to the Total Purchase Agreement for replacement 1.5% Senior Secured Convertible Notes due March 2017,
and grant a security interest to Total in and lien on all the Company’s rights, title and interest in and to the Company’s
shares in the capital of TAB. Following execution of the JV Documents, all Unsecured R&D Notes that had been issued were exchanged
for Secured R&D Notes. Further, the $10.85 million in principal amount of such notes issued in the initial tranche of the third
closing under the Total Purchase Agreement in July 2014 and the $10.85 million in principal amount of such notes issued in the
second tranche of the third closing were Secured R&D Notes instead of Unsecured R&D Notes. "See Note 5,"Debt"
for details regarding the impact of the Exchange and Maturity Treatment Agreement on the R&D Notes. In March 2016, as a result
of the restructuring of TAB discussed under Note 5, "Debt" and Note 7, "Joint Venture and Noncontrolling Interests,"
the remaining Secured R&D Notes were exchanged for an unsecured R&D Note in the principal amount of $3.7 million.

35

The Senior Secured Loan Facility and the June
2016 Notes (see Note 5, "Debt") are collateralized by first and second priority liens, respectively, on the Company's assets,
including certain Company intellectual property.

Purchase Obligations

As of September 30, 2016 and December 31,
2015, the Company had $1.1 million and $1.3 million, respectively, in purchase obligations which included $0.6 million and $0.5
million, respectively, of non-cancellable contractual obligations and construction commitments.

Other Matters

Certain conditions may exist as of the date
the financial statements are issued, which may result in a loss to the Company but will only be recorded when one or more future
events occur or fail to occur. The Company's management assesses such contingent liabilities, and such assessment inherently involves
an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against and by the Company
or unasserted claims that may result in such proceedings, the Company's management evaluates the perceived merits of any legal
proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency
is not probable but is reasonably possible, or is probable but cannot be reasonably estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies
considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would
be disclosed. The Company has levied indirect taxes on sugarcane-based biodiesel sales by Amyris Brasil to customers in Brasil
based on advice from external legal counsel. In the absence of definitive rulings from the Brazilian tax authorities on the appropriate
indirect tax rate to be applied to such product sales, the actual indirect rate to be applied to such sales could differ from the
rate we levied.

The Company is subject to disputes and claims
that arise or have arisen in the ordinary course of business and that have not resulted in legal proceedings or have not been fully
adjudicated. Such matters that may arise in the ordinary course of business are subject to many uncertainties and outcomes are
not predictable with reasonable assurance and therefore an estimate of all the reasonably possible losses cannot be determined
at this time. Therefore, if one or more of these legal disputes or claims resulted in settlements or legal proceedings that were
resolved against the Company for amounts in excess of management’s expectations, the Company’s consolidated financial
statements for the relevant reporting period could be materially adversely affected.

7. Joint Ventures and Noncontrolling Interests

Novvi LLC

In September 2011, the Company and Cosan US,
Inc. (or “Cosan U.S.”) formed Novvi LLC (or “Novvi”), a U.S. entity that is jointly owned by the Company
and Cosan U.S. In March 2013, the Company and Cosan U.S. entered into agreements to (i) expand their base oils joint venture
to also include additives and lubricants and (ii) operate their joint venture exclusively through Novvi. Specifically, the parties
entered into an Amended and Restated Operating Agreement for Novvi (or the “Operating Agreement”), which sets forth
the governance procedures for Novvi and the parties' initial contribution. The Company also entered into an IP License Agreement
with Novvi (as amended in March 2016, the “IP License Agreement”) under which the Company granted Novvi (i) an exclusive
(subject to certain limited exceptions for the Company), worldwide, royalty-free license to develop, produce and commercialize
base oils, additives, and lubricants derived from Biofene for use in automotive, commercial, and industrial lubricants markets,
and (ii) a non-exclusive, royalty free license, subject to certain conditions, to manufacture Biofene solely for its own products.
In addition, both the Company and Cosan U.S. granted Novvi certain rights of first refusal with respect to alternative base oil
and additive technologies that may be acquired by the Company or Cosan U.S. during the term of the IP License Agreement. Under
these agreements, through September 30, 2016 the Company and Cosan U.S. each owned 50% of Novvi and each party shared equally in
any costs and any profits ultimately realized by the joint venture. Novvi is governed by a six member Board of Managers (or the
“Board of Managers”). The Board of Managers appoints the officers of Novvi, who are responsible for carrying out the
daily operating activities of Novvi as directed by the Board of Managers. The IP License Agreement has an initial term of 20 years
from the date of the agreement, subject to standard early termination provisions such as uncured material breach or a party's insolvency.
Under the terms of the Operating Agreement, Cosan U.S. was obligated to fund its initial 50% ownership share of Novvi in cash in
the amount of $10.0 million and the Company was obligated to fund its initial 50% ownership share of Novvi through the granting
of an IP License to develop, produce and commercialize base oils, additives, and lubricants derived from Biofene for use in the
automotive, commercial and industrial lubricants markets, which Cosan U.S. and Amyris agreed was valued at $10.0 million. In March 2013,
the Company measured its initial contribution of intellectual property to Novvi at the Company's carrying value of the licenses
granted under the IP License Agreement, which was zero.

36

In April 2014, the Company, via its forgiveness
of existing receivables due from Novvi related to rent and other services performed by the Company, purchased additional membership
units of Novvi for a purchase price of $0.2 million. Concurrently, Cosan U.S. purchased an equal amount of additional membership
units of Novvi. Also in April 2014, the Company and Cosan U.S. each contributed $2.1 million in cash in exchange for receiving
additional membership units in Novvi. Following such transactions, the Company and Cosan U.S. continued to each own 50% of Novvi's
issued and outstanding membership units.

In September 2014, the Company and Cosan U.S.
entered into a member senior loan agreement to grant Novvi a loan amounting to approximately $3.7 million. The loan is due on September
1, 2017 and bears interest at a rate of 0.36% per annum. Interest accrues daily and is due and payable in arrears on September
1, 2017. The Company and Cosan U.S. each agreed to provide 50% of the loan. The Company's share of approximately $1.8 million was
disbursed in two installments. The first installment of $1.2 million was made in September 2014 and the second installment of $0.6
million was made in October 2014. In November 2014, the Company and Cosan U.S. entered into a second member senior loan agreement
to grant Novvi a loan of approximately $1.9 million on the same terms as the loan issued in September 2014, except that the due
date is November 10, 2017. The Company and Cosan U.S. each agreed to provide 50% of the loan. The Company disbursed its share of
the loan (i.e., approximately $1.0 million) in November 2014. In May 2015, the Company and Cosan U.S. entered into a third member
senior loan agreement to grant Novvi a loan of approximately $1.1 million on the same terms as the loan issued in September 2014,
except that the due date is May 14, 2018. The Company and Cosan U.S. each agreed to provide 50% of the loan.

In the fourth quarter of 2015, the Company and
Cosan U.S. entered into four additional member senior loan agreements to grant Novvi an aggregate loan of approximately $1.6 million
on the same terms as the loan issued in September 2014, except that the respective due dates are August 19, 2018, October 15, 2018,
November 12, 2018 and December 17, 2018. The Company and Cosan U.S. each agreed to provide 50% of each of these four loans. In
July 2016, the Company contributed all outstanding amounts owing by Novvi to the Company under the seven member senior loan agreements
in exchange for receiving additional membership units in Novvi.

In February 2016, the Company purchased additional
membership units of Novvi for an aggregate purchase price of approximately $0.6 million in the form of forgiveness of existing
receivables due from Novvi related to rent and other services performed by the Company, and Cosan U.S. purchased an equal number
of additional membership units in Novvi for approximately $0.6 million in cash. Following such transactions, each member continued
to own 50% of Novvi's issued and outstanding membership units.

On July 19, 2016, American Refining Group, Inc. (or “ARG”) agreed to make a capital contribution
of up to $10.0 million in cash to Novvi, subject to certain conditions, in exchange for a one third ownership stake in Novvi. In
connection with such investment, the Company agreed to contribute all outstanding amounts owed by Novvi to the Company under the
seven existing member senior loan agreements between the Company and Novvi, as well as certain existing receivables due from Novvi
to the Company related to rent and other services performance by the Company, in exchange for receiving additional membership units
in Novvi. Likewise, Cosan U.S. contributed an equal amount to Novvi as the Company in exchange for receiving an equal amount of
additional membership interests in Novvi. Following the ARG investment, assuming it is made in full, and the capital contributions
of the Company and Cosan U.S., each of Novvi’s three members (i.e., ARG, the Company and Cosan U.S.) will own one third of
Novvi’s issued and outstanding membership units and will each be represented by two members of the Board of Managers. In
order to reflect the ARG investment in Novvi and related transactions, the Amended and Restated Operating Agreement of Novvi was
amended and restated on July 19, 2016. In addition, the IP License Agreement between Novvi and the Company was also amended on
July 19, 2016. As of September 30, 2016, $4.0 million of ARG's capital contribution to Novvi had been funded.

37

Additional funding requirements to finance the
ongoing operations of Novvi are expected to happen through revolving credit or other loan facilities provided by unrelated parties
(i.e., such as financial institutions); cash advances or other credit or loan facilities provided by Novvi’s members or their
affiliates; or additional capital contributions by the existing Novvi members or new investors.

The Company has identified Novvi as a VIE and
determined that the power to direct activities, which most significantly impact the economic success of the joint venture (i.e.,
continuing research and development, marketing, sales, distribution and manufacturing of Novvi products), the Company and Cosan
U.S. Accordingly, the Company is not the primary beneficiary and therefore accounts for its investment in Novvi under the equity
method of accounting. The Company will continue to reassess its primary beneficiary analysis of Novvi if there are changes in events
and circumstances impacting the power to direct activities that most significantly affect Novvi's economic success. Under the equity
method, the Company's share of profits and losses and impairment charges on investments in affiliates are included in “Loss
from investments in affiliates” in the condensed consolidated statements of operations. The carrying amount of the Company's
equity investment in Novvi as of September 30, 2016 and December 31, 2015 was zero and the Company recognized zero and $0.7 million
losses for the three months ended September 30, 2016 and 2015, respectively, and zero and $2.1 million for the nine months ended
September 30, 2016 and 2015, respectively.

Total Amyris BioSolutions B.V.

In November 2013, the Company and Total formed
Total Amyris BioSolutions B.V. (or “TAB”), a joint venture to produce and commercialize farnesene- or farnesane-based
jet and diesel fuels. Prior to the restructuring of TAB in March 2016 as described below, the common equity of TAB was owned equally
by the Company and Total, and TAB’s purpose was limited to executing the License Agreement dated December 2, 2013 between
the Company, Total and TAB and maintaining such licenses under it, unless and until either (i) Total elected to go forward with
either the full (diesel and jet fuel) TAB commercialization program or the jet fuel component of the TAB commercialization program
(or a “Go Decision”), (ii) Total elected to not continue its participation in the R&D Program and TAB (or a “No-Go
Decision”), or (iii) Total exercised any of its rights to buy out the Company’s interest in TAB. Following a Go
Decision, the articles and shareholders’ agreement of TAB would be amended and restated to be consistent with the shareholders’
agreement contemplated by the Total Fuel Agreements (see Note 5, "Debt" and Note 8, "Significant Agreements").

In July 2015, the Company and Total entered
into a Letter Agreement (or, as amended in February 2016, the “TAB Letter Agreement”) regarding the restructuring of
the ownership and rights of TAB (or the “Restructuring”), pursuant to which the parties agreed to, among other things,
enter into an Amended & Restated Jet Fuel License Agreement between the Company and TAB (or the “Jet Fuel Agreement”),
a License Agreement regarding Diesel Fuel in the European Union (or the “EU”) between the Company and Total (or the
“EU Diesel Fuel Agreement”), and an Amended and Restated Shareholders’ Agreement among the Company, Total and
TAB, and file a Deed of Amendment of Articles of Association of TAB, all in order to reflect certain changes to the ownership structure
of TAB and license grants and related rights pertaining to TAB.

On February 12, 2016, the Company and Total
entered into an amendment to the TAB Letter Agreement, pursuant to which the parties agreed that, upon the closing of the Restructuring,
Total would cancel R&D Notes in an aggregate principal amount of approximately $1.3 million, plus all paid-in-kind and accrued
interest as of the closing of the Restructuring under all outstanding R&D Notes (including all such interest that was outstanding
as of July 29, 2015), and a note in the principal amount of Euro 50,000, plus accrued interest, issued by the Company to Total
in connection with the existing TAB capitalization, in exchange for an additional 25% ownership interest of TAB (giving Total an
aggregate ownership stake of 75% of TAB and giving the Company an aggregate ownership stake of 25% of TAB). In connection therewith,
Total would surrender to the Company the remaining R&D Notes and the Company would provide to Total a new unsecured senior
convertible note, containing substantially similar terms and conditions, in the principal amount of $3.7 million (collectively,
the “TAB Share Purchase”).

38

On March 21, 2016, the Company, Total and TAB
closed the Restructuring and the TAB Share Purchase. See Note 5, “Debt” for further details of the impact of these
transaction on the Company’s condensed consolidated financial statements.

Under the Jet Fuel Agreement, (a) the Company
granted exclusive (co-exclusive in Brazil), world-wide, royalty-free rights to TAB for the production and commercialization of
farnesene- or farnesane-based jet fuel, (b) the Company granted TAB the option, until March 1, 2018, to purchase the Company’s
Brazil jet fuel business at a price based on the fair value of the commercial assets and on the Company’s investment in other
related assets, (c) the Company granted TAB the right to purchase farnesene or farnesane for its jet fuel business from the Company
on a “most-favored” pricing basis and (d) all rights to farnesene- or farnesane-based diesel fuel previously granted
to TAB by the Company reverted back to the Company. As a result of the Jet Fuel Agreement, the Company generally no longer has
an independent right to make or sell, without the approval of TAB, farnesene- or farnesane-based jet fuels outside of Brazil.

Upon all farnesene-or farnesane-based diesel
fuel rights reverting back to the Company, the Company granted to Total, pursuant to the EU Diesel Fuel Agreement, (a) an exclusive,
royalty-free license to offer for sale and sell farnesene- or farnesane-based diesel fuel in the EU, (b) the non-exclusive right
to make farnesene or farnesane anywhere in the world, but Total must (i) use such farnesene or farnesane to produce only diesel
fuel to offer for sale or sell in the EU and (ii) pay the Company a to-be-negotiated, commercially reasonable, “most-favored”
basis royalty and (c) the right to purchase farnesene or farnesane for its EU diesel fuel business from the Company on a “most-favored”
pricing basis. As a result of the EU Diesel Fuel Agreement, the Company generally no longer has an independent right to make or
sell, without the approval of TAB, farnesene- or farnesane-based diesel fuels in the EU.

As a result of, and in order to reflect, the
changes to the ownership structure of TAB described above, on March 21, 2016, (a) the Company, Total and TAB entered into an Amended
and Restated Shareholders’ Agreement and filed a Deed of Amendment of Articles of Association of TAB and (b) the Company
and Total terminated the Amended and Restated Master Framework Agreement, dated December 2, 2013 and amended on April 1, 2015,
between the Company and Total.

As of September 30, 2016, the common equity
of TAB was owned 25% by the Company and 75% by Total. TAB has a capitalization as of September 30, 2016 of €0.1 million
(approximately US$0.1 million based on the exchange rate as of September 30, 2016). The Company has identified TAB as a VIE
and determined that the Company is not the primary beneficiary and therefore accounts for its investment in TAB under the equity
method of accounting. Under the equity method, the Company's share of profits and losses are included in “Loss from investment
in affiliate” in the consolidated statements of operations.

SMA Indústria Química S.A.

In April 2010, the Company established
SMA Indústria Química (or "SMA"), a joint venture with São Martinho S.A. (or "SMSA"),
to build a production facility in Brazil. SMA is located at the SMSA mill in Pradópolis, São Paulo state. The joint
venture agreements establishing SMA have a 20 year initial term.

SMA was initially managed by a three member
executive committee, of which the Company appointed two members, one of whom is the plant manager who is the most senior executive
responsible for managing the construction and operation of the facility. SMA was initially governed by a four member board of directors,
of which the Company and SMSA each appointed two members. The board of directors had certain protective rights which include final
approval of the engineering designs and project work plan developed and recommended by the executive committee.

39

The joint venture agreements required the Company
to fund the construction costs of the new facility and SMSA would reimburse the Company up to R$61.8 million (approximately US$19.0
million based on the exchange rate as of September 30, 2016) of the construction costs after SMA commences production. After
commercialization, the Company would market and distribute Amyris renewable products produced by SMA and SMSA would sell feedstock
and provide certain other services to SMA. The cost of the feedstock to SMA would be a price that is based on the average return
that SMSA could receive from the production of its current products, sugar and ethanol. The Company would be required to purchase
the output of SMA for the first four years at a price that guarantees the return of SMSA’s investment plus a fixed interest
rate. After this four year period, the price would be set to guarantee a break-even price to SMA plus an agreed upon return.

Under the terms of the joint venture agreements,
if the Company became controlled, directly or indirectly, by a competitor of SMSA, then SMSA would have the right to acquire the
Company’s interest in SMA. If SMSA became controlled, directly or indirectly, by a competitor of the Company, then the Company
would have the right to sell its interest in SMA to SMSA. In either case, the purchase price would be determined in accordance
with the joint venture agreements, and the Company would continue to have the obligation to acquire products produced by SMA for
the remainder of the term of the supply agreement then in effect even though the Company would no longer be involved in SMA’s
management.

The Company initially had a 50% ownership interest
in SMA. The Company has identified SMA as a VIE pursuant to the accounting guidance for consolidating VIEs because the amount of
total equity investment at risk is not sufficient to permit SMA to finance its activities without additional subordinated financial
support, as well as because the related commercialization agreement provides a substantive minimum price guarantee. Under the terms
of the joint venture agreement, the Company directed the design and construction activities, as well as production and distribution.
In addition, the Company had the obligation to fund the design and construction activities until commercialization was achieved.
Subsequent to the construction phase, both parties equally would fund SMA for the term of the joint venture. Based on those factors,
the Company was determined to have the power to direct the activities that most significantly impact SMA’s economic performance
and the obligation to absorb losses and the right to receive benefits. Accordingly, the financial results of SMA are included in
the Company’s consolidated financial statements and amounts pertaining to SMSA’s interest in SMA are reported as noncontrolling
interests in subsidiaries.

The Company completed a significant portion
of the construction of the new facility in 2012. The Company suspended construction of the facility in 2013 in order to focus on
completing and operating the Company's smaller production facility in Brotas, Brazil. In February 2014, the Company entered into
an amendment to the joint venture agreement with SMSA which updated and documented certain preexisting business plan requirements
related to the recommencement of construction at the joint venture operated plant and sets forth, among other things, (i) the extension
of the deadline for the commencement of operations at the joint venture operated plant to no later than 18 months following the
construction of the plant no later than March 31, 2017, and (ii) the extension of an option held by SMSA to build a second large-scale
farnesene production facility to no later than December 31, 2018 with the commencement of operations at such second facility to
occur no later than April 1, 2019. On July 1, 2015 SMSA filed a material fact document with CVM, the Brazilian securities regulator,
that announced that certain contractual targets undertaken by the Company have not been achieved, which affects the feasibility
of the project. Therefore, SMSA decided not to approve continuing construction of the plant for the joint venture with the Company
and its Brazilian subsidiary Amyris Brasil. In July 2015, the Company announced that it was in discussions with SMSA regarding
the continuation of the joint venture. In December 2015, the Company and SMSA entered into a Termination Agreement and a Share
Purchase and Sale Agreement relating to the termination of the joint venture. Under the Termination Agreement, the parties agreed
that the joint venture would be terminated effective upon the closing of a purchase by Amyris Brasil of SMSA’s shares of
SMA. Under the Share Purchase and Sale Agreement, Amyris Brasil agreed to purchase, for R$50,000 (approximately US$15,426 based
on the exchange rate as of September 30, 2016), 50,000 shares of SMA (representing all the outstanding shares of SMA held
by SMSA), which purchase and sale was consummated on January 11, 2016. The Share Purchase and Sale Agreement also provided that
the Company and Amyris Brasil would have 12 months following the closing of the share purchase to remove assets from SMSA’s
site, and enter into an extension of the lease for such 12 month period for monthly rental payments of R$9,853 (approximately US$3,040
based on the exchange rate as of September 30, 2016). The Share Purchase and Sale Agreement also clarified that the Company
and Amyris Brasil would not be required to demolish or remove the foundations of the plant at the SMSA site. On September 1, 2016,
the parties entered into an addendum to the Share Purchase and Sale Agreement (and a corresponding amendment to the lease) which
extended the deadline for the Company and Amyris Brasil to remove assets from SMSA’s site until December 31, 2017.

40

Glycotech

In January 2011, the Company entered into a
production service agreement (or the "Glycotech Agreement") with Glycotech, Inc. (or "Glycotech"), under which
Glycotech provides process development and production services for the manufacturing of various Company products at its leased
facility in Leland, North Carolina. The Company products manufactured by Glycotech are owned and distributed by the Company. Pursuant
to the terms of the Glycotech Agreement, the Company is required to pay the manufacturing and operating costs of the Glycotech
facility, which is dedicated solely to the manufacture of Amyris products. The initial term of the Glycotech Agreement was for
a two year period commencing on February 1, 2011 and the Glycotech Agreement renews automatically for successive one-year
terms, unless terminated by the Company. Concurrent with the Glycotech Agreement, the Company also entered into a Right of First
Refusal Agreement with the lessor of the facility and site leased by Glycotech (or the "ROFR Agreement"). Per conditions
of the ROFR Agreement, the lessor agreed not to sell the facility and site leased by Glycotech during the term of the Glycotech
Agreement. In the event that the lessor is presented with an offer to sell or decides to sell an adjacent parcel, the Company has
the right of first refusal to acquire it.

The Company has determined that the arrangement
with Glycotech qualifies as a VIE. The Company determined that it is the primary beneficiary of this arrangement since it has the
power through the management committee over which it has majority control to direct the activities that most significantly impact
Glycotech's economic performance. In addition, the Company is required to fund 100% of Glycotech's actual operating costs for providing
services each month while the facility is in operation under the Glycotech Agreement. Accordingly, the Company consolidates the
financial results of Glycotech. The carrying amounts of Glycotech's assets and liabilities were not material to the Company's condensed
consolidated financial statements.

The table below reflects the carrying amount
of the assets and liabilities of the consolidated VIE for which the Company is the primary beneficiary at September 30, 2016 (two
at December 31, 2015). As of September 30, 2016 and December 31, 2015, the assets include $0.1 million and $5.2 million
in property, plant and equipment, respectively, $0.4 million and $1.5 million in current assets, respectively, and zero and $0.3
million in other assets as of September 30, 2016 and December 31, 2015 include, respectively. As of September 30, 2016 and December
31, 2015, the liabilities include $0.2 million and $1.1 million, respectively, in accounts payable and accrued current liabilities,
and $0.1 million and $0.1 million, respectively, in loan obligations by Glycotech to its shareholders that are non-recourse to
the Company. The creditors of each consolidated VIE have recourse only to the assets of that VIE.

(In thousands)

September 30,
2016

December 31,
2015

Assets

$

493

$

6,993

Liabilities

$

257

$

1,221

The change in noncontrolling interest for the
nine months ended September 30, 2016 and 2015, is summarized below (in thousands):

2016

2015

Balance at January 1

$

391

$

611

Foreign currency translation adjustment

—

(393

)

Income attributable to noncontrolling interest

—

78

Acquisition of noncontrolling interest

(277

)

—

Balance at September 30

$

114

$

296

41

8. Significant Agreements

Research and Development Activities

Total Collaboration Arrangement

In June 2010, the Company entered into a technology
license, development, research and collaboration agreement (or the “Total Collaboration Agreement”) with Total Gas &
Power USA Biotech, Inc., an affiliate of Total. This agreement provided for joint collaboration on the development of products
through the use of the Company’s synthetic biology platform. In November 2011, the Company entered into a first amendment
of the Total Collaboration Agreement with respect to development and commercialization of Biofene for fuels. This represented an
expansion of the initial collaboration with Total, and established a global, exclusive collaboration for the development of Biofene
for fuels and a framework for the creation of a joint venture to manufacture and commercialize Biofene for diesel. In addition,
a limited number of other potential products were subject to development by the joint venture on a non-exclusive basis.

The first amendment provided for an exclusive
strategic collaboration for the development of renewable diesel products and contemplated that the parties would establish a joint
venture (or the “JV”) for the production and commercialization of such renewable diesel products on an exclusive, worldwide
basis. In addition, the first amendment contemplated providing the JV with the right to produce and commercialize certain other
chemical products on a non-exclusive basis. The first amendment further provided that definitive agreements to form the JV had
to be in place by March 31, 2012 or such other date as agreed to by the parties or the renewable diesel program, including
any further collaboration payments by Total related to the renewable diesel program, would terminate. In the second quarter of
2012, the parties extended the deadline to June 30, 2012, and, through June 30, 2012, the parties were engaged in discussions regarding
the structure of future payments related to the program, until the first amendment was superseded by a second amendment in July
2012 (as further described below).

Pursuant to the first amendment, Total agreed
to fund the following amounts: (i) the first $30.0 million in research and development costs related to the renewable diesel
program incurred since August 1, 2011, which amount would be in addition to the $50.0 million in research and development
funding contemplated by the Total Collaboration Agreement, and (ii) for any research and development costs incurred following
the JV formation date that were not covered by the initial $30.0 million, an additional $10.0 million in 2012 and up to an additional
$10.0 million in 2013, which amounts would be considered part of the $50.0 million contemplated by the Total Collaboration Agreement.
In addition to these payments, Total further agreed to fund 50% of all remaining research and development costs for the renewable
diesel program under the Amendment.

In July 2012, the Company entered into a second
amendment of the Total Collaboration Agreement that expanded Total’s investment in the Biofene collaboration, incorporated
the development of certain JV products for use in diesel and jet fuel into the scope of the collaboration, and changed the structure
of the funding from Total for the collaboration by establishing a convertible debt structure for the collaboration funding (see
Note 5, “Debt”). In connection with such second amendment Total and the Company also executed certain other related
agreements. Under these agreements (collectively referred to as the “Total Fuel Agreements”), the parties would grant
exclusive manufacturing and commercial licenses to the JV for the JV products (diesel and jet fuel from Biofene) when the JV was
formed. The licenses to the JV were to be consistent with the principle that development, production and commercialization of the
JV products in Brazil would remain with Amyris unless Total elected, after formation of the operational JV, to have such business
contributed to the joint venture. Further, as part of the Total Fuel Agreements, Total's royalty option contingency related to
diesel was removed and the jet fuel collaboration was combined with the expanded Biofene collaboration. As a result, $46.5 million
of payments previously received from Total that had been recorded as an advance from Total were no longer contingently repayable.
Of this amount, $23.3 million was treated as a repayment by the Company and included as part of the senior unsecured convertible
promissory note issued to Total in July 2012 and the remaining $23.2 million was recorded as a contract to perform research and
development services, which was offset by the reduction of the capitalized deferred charge asset of $14.4 million resulting in
the Company recording revenue from a related party of $8.9 million in 2012. On March 21, 2016, the Company and Total consummated
a restructuring of the JV pursuant to a letter agreement dated July 26, 2015, as amended on February 12, 2016, which restructuring
included, among other things, the parties amending certain of the Total Fuel Agreements and the Company selling part of its ownership
stake in the JV to Total in exchange for Total cancelling certain outstanding indebtedness issued to Total by the Company. In July
2016, the Company and Total agreed to extend the term of the Total Collaboration Agreement from July 31, 2016 to March 1, 2017
pursuant to the terms of the Total Collaboration Agreement. See Note 5, "Debt" and Note 7, "Joint Ventures and Noncontrolling
Interest" for further details of the Company’s relationship with Total.

42

F&F Collaboration Agreement

In March 2013, the Company entered into
a Master Collaboration Agreement (or, as amended in July 2015, the “F&F Collaboration Agreement”) with a collaboration
partner to establish a collaboration arrangement for the development and commercialization of multiple renewable flavors and fragrances
compounds. Under the F&F Collaboration Agreement, except for rights granted under pre-existing collaboration relationships,
the Company granted the collaboration partner exclusive access to specified Company intellectual property for the development and
commercialization of flavors and fragrances compounds in exchange for research and development funding and a profit sharing arrangement.
The F&F Collaboration Agreement superseded and expanded the November 2010 Master Collaboration and Joint Development Agreement
between the Company and the collaboration partner.

The F&F Collaboration Agreement provided
for annual, up-front funding to the Company by the collaboration partner of $10.0 million for each of the first three years of
the collaboration. Payments of $10.0 million were received by the Company in each of March 2013, 2014 and 2015. The F&F Collaboration
Agreement contemplates additional funding by the collaboration partner of up to $5.0 million under four potential milestone payments,
as well as additional funding by the collaboration partner on a discretionary basis. Through September 2016, the Company had achieved
the third performance milestone under the F&F Collaboration Agreement and recognized collaboration revenues of $1.3 million
under the F&F Collaboration Agreement for the three months ended September 30, 2016 and $5.5 million for the nine months ended
September 30, 2016. The F&F Collaboration Agreement does not impose any specific research and development obligations on either
party after year six, but provides that if the parties mutually agree to perform research and development activities after year
six, the parties will fund such activities equally.

Under the F&F Collaboration Agreement, the
parties agreed to jointly select target compounds, subject to final approval of compound specifications by the collaboration partner.
During the development phase, the Company would be required to provide labor, intellectual property and technology infrastructure
and the collaboration partner would be required to contribute downstream polishing expertise and market access. The F&F Collaboration
Agreement provides that the Company will own research and development and strain engineering intellectual property, and the collaboration
partner will own blending and, if applicable, chemical conversion intellectual property. Under certain circumstances, such as the
Company’s insolvency, the collaboration partner would gain expanded access to the Company’s intellectual property.
The F&F Collaboration Agreement contemplates that, following development of flavors and fragrances compounds, the Company will
manufacture the initial target molecules for the compounds and the collaboration partner will perform any required downstream polishing
and distribution, sales and marketing. The F&F Collaboration Agreement provides that the parties will mutually agree on a supply
price for each compound developed under the agreement and, subject to certain exceptions, will share product margins from sales
of each such compound on a 70/30 basis (70% for the collaboration partner) until the collaboration partner receives $15.0 million
more than the Company in the aggregate from such sales, after which time the parties will share the product margins 50/50. The
Company also agreed to pay a one-time success bonus to the collaboration partner of up to $2.5 million if certain commercialization
targets are met.

In September 2014, the Company entered into
a supply agreement with the collaboration partner for a compound developed under the F&F Collaboration Agreement. The Company
recognized $0.1 million and $1.3 million of revenues from product sales under this agreement for the three months ended September
30, 2016 and 2015, respectively and $4.7 million and $1.3 million for the nine months ended September 30, 2016 and 2015.

43

Michelin and Braskem Collaboration Agreements

In June 2014, the Company entered into a collaboration
agreement with Braskem S.A. (or “Braskem”) and Manufacture Francaise de Pnematiques Michelin (or “Michelin”)
to collaborate to develop the technology to produce and possibly commercialize renewable isoprene. The term of the collaboration
agreement commenced on June 30, 2014 and will continue, unless earlier terminated in accordance with the agreement, until the first
to occur of (i) the date that is three years following the actual date on which a work plan is completed, which date is estimated
to occur on or about December 30, 2020, or (ii) the date of the commencement of commissioning of a production plant for the production
of renewable isoprene. The June 2014 collaboration agreement terminated and superseded the September 2011 collaboration agreement
between the Company and Michelin and, as a result of the signing of the June 2014 collaboration agreement, the upfront payment
by Michelin of $5.0 million under the September 2011 collaboration agreement was rolled forward into the new collaboration agreement
as Michelin’s funding towards the research and development activities to be performed under the new collaboration agreement.
Braskem contributed $4.0 million of funding to the research and development activities under the June 2014 collaboration agreement,
of which $2.0 million was received in July 2014 and $2.0 million was received in January 2015.

For this collaboration agreement, the Company
recognized collaboration revenues of zero and zero for the three months ended September 30, 2016 and 2015, respectively, and $0.1
million and $1.9 million for the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016 and 2015,
$6.5 million and $6.3 million, respectively, of deferred revenues were recorded in the condensed consolidated balance sheet related
to these agreements.

Kuraray Collaboration Agreement and Securities
Purchase Agreement

In March 2014, the Company entered into the
Second Amended and Restated Collaboration Agreement with Kuraray Co., Ltd (or “Kuraray”) in order to extend the term
of the original collaboration agreement between the Company and Kuraray dated July 21, 2011 for an additional two years and
add additional fields and products to the scope of development. In consideration for the Company’s agreement to extend the
term of the original collaboration agreement and add additional fields and products, Kuraray agreed to pay the Company $4.0 million
in two equal installments of $2.0 million. The first installment was paid on April 30, 2014 and the second installment was
due on April 30, 2015. In connection with entering into the Second Amended and Restated Collaboration Agreement, Kuraray signed
a Securities Purchase Agreement in March 2014 to purchase 943,396 shares of the Company's common stock at a price per share of
$4.24 per share, which shares were sold and issued in April 2014 for aggregate cash proceeds to the Company of $4.0 million. In
March 2015, the Company and Kuraray entered into the First Amendment to the Second Amended and Restated Collaboration Agreement
to extend the term of the original collaboration agreement until December 31, 2016 and to accelerate payment to the Company of
the second installment of $2.0 million due from Kuraray under the Second Amended and Restated Collaboration Agreement to March
31, 2015.

The Company recognized collaboration revenues
of $0.4 million and $0.3 million for the three months ended September 30, 2016 and 2015, and $1.1 million and $1.2 million
for the nine months ended September 30, 2016 and 2015, respectively, under this agreement.

DARPA

In September 2015, the Company entered into
a Technology Investment Agreement (or the “2015 TIA”) with The Defense Advanced Research Projects Agency (or “DARPA”),
under which the Company, with the assistance of five specialized subcontractors, will work to create new research and development
tools and technologies for strain engineering and scale-up activities. The program that is the subject of the 2015 TIA will be
performed and funded on a milestone basis, where DARPA, upon the Company’s successful completion of each milestone event
in the 2015 TIA, will pay the Company the amount set forth in the 2015 TIA corresponding to such milestone event. Under the 2015
TIA, the Company and its subcontractors could collectively receive DARPA funding of up to $35.0 million over the program’s
four year term if all of the program’s milestones are achieved. In conjunction with DARPA’s funding, the Company and
its subcontractors are obligated to collectively contribute approximately $15.5 million toward the program over its four year term
(primarily by providing specified labor and/or purchasing certain equipment). The Company can elect to retain title to the patentable
inventions it produces under the program, but DARPA receives certain data rights as well as a government purposes license to certain
of such inventions. Either party may, upon written notice and subject to certain consultation obligations, terminate the 2015 TIA
upon a reasonable determination that the program will not produce beneficial results commensurate with the expenditure of resources.

44

The Company recognized collaboration revenues
of $1.3 million and zero under this agreement for the three months ended September 30, 2016 and 2015, respectively, and $4.8 million
and zero for the nine months ended September 30, 2016 and 2015, respectively.

Givaudan Collaboration Agreement

In June 2016, the Company entered into a Collaboration
Agreement with Givaudan International, SA (or “Givaudan”), a global flavors and fragrances company, to establish a
collaboration for the development and commercialization of certain renewable compounds for use in the fields of active cosmetics
and flavors. Under this collaboration agreement, the Company will use its labor, intellectual property and technology infrastructure
to develop and commercialize certain compounds for Givaudan. In exchange, Givaudan will pay to the Company $12.0 million in semi-annual
installments of $3.0 million each, beginning on June 30, 2016. The Company received the first installment of $3.0 million on June
30, 2016 and this amount was recognized in deferred revenue as of that date.

Pursuant to this collaboration agreement, the
Company will grant to Givaudan an exclusive license to the intellectual property that the Company generates under the agreement.
Such license will include the rights to make, use and sell compounds in the active cosmetics and flavors fields, and is subject
to certain ‘claw back’ rights by the Company if a compound is not commercialized by Givaudan during the term of the
agreement. The Company will also grant to Givaudan non-exclusive rights to certain portions of the Company’s existing intellectual
property in order to facilitate activities under the agreement. Givaudan, on the other hand, will grant to the Company a non-exclusive
license to the intellectual property that is generated under the agreement. Such non-exclusive license will include the rights
to make, use and sell compounds in all fields except active cosmetics and flavors.

Subject to certain rights granted to a third
party, Givaudan will have the exclusive right to commercialize the compounds in the active cosmetics and flavors markets during
the term of the agreement. Further, the Company has agreed that it will not assist any third party in the development or commercialization
of other compounds for sale or use in the active cosmetics or flavors markets during the term of the agreement. In addition, the
agreement contemplates that the Company will be the primary supplier of commercial quantities of the compounds to Givaudan pursuant
to supply agreements to be mutually negotiated by the parties.

The Company recognized collaboration revenues
of $1.6 million under this agreement for the three months ended September 30, 2016.

In June 2016, the Company entered into an Initial Strategic Partnership Agreement (or the “Initial
Ginkgo Agreement”) with Ginkgo Bioworks, Inc. (or “Ginkgo”), pursuant to which the Company licensed certain intellectual
property to Ginkgo in exchange for a fee of $20.0 million, to be paid by Ginkgo to the Company in two installments, and a ten percent
royalty. The first installment of $15.0 million was received on July 25, 2016. The second installment, in the amount of $5.0 million
is to be received, based upon the satisfaction of certain conditions as set forth below, by March 31, 2017. The Company recognized
$15 million of collaboration revenue under the Initial Ginkgo Agreement for the three months ended September 30, 2016. Furthermore,
in connection with the Initial Ginkgo Agreement, on June 29, 2016, the Company received a deferment of all scheduled principal
repayments under the Senior Secured Loan Facility, the lender and administrative agent under which is an affiliate of Ginkgo, as
well as a waiver of the Minimum Cash Covenant, through October 31, 2016.

In addition, addition, pursuant to the Initial Ginkgo Agreement, the Company and Ginkgo agreed to pursue the negotiation
and execution of a detailed definitive partnership and license agreement setting forth the terms of a commercial partnership and
collaboration arrangement between the parties (or the “Collaboration”) and, in connection with the entry into the Initial
Ginkgo Agreement, on June 29, 2016, the Company received a deferment of all scheduled principal repayments under the Senior Secured
Loan Facility, as well as a waiver of the Minimum Cash Covenant, through October 31, 2016. Furthermore, pursuant to the Initial
Ginkgo Agreement, in connection with the execution of the definitive agreement for the Collaboration, (i) the Company would issue
to Ginkgo an option to purchase five million shares of common stock of the Company at an exercise price of $0.50, exercisable for
one year from the date of issuance and (ii) the parties would effect an amendment of the Company’s Senior Secured Loan Facility
to (x) extend the maturity date of all outstanding loans under the Senior Secured Loan Facility, (y) waive any required amortization
payments under the Senior Secured Loan Facility until maturity and (z) eliminate the Minimum Cash Covenant under the Senior Secured
Loan Facility.

45

On August 6, 2016, the Company issued to Ginkgo a warrant to purchase five million shares of the Company’s
common stock at an exercise price of $0.50 per share, exercisable for one year from the date of issuance. The warrant was issued
prior to the execution of the definitive agreement for the Collaboration in connection with the transfer of certain information
technology from Ginkgo to the Company.

On September 30, 2016, the Company and Ginkgo
entered into a Collaboration Agreement (or the “Ginkgo Collaboration Agreement”) setting forth the terms of the Collaboration,
under which the parties will collaborate to develop, manufacture and sell commercial products and will share in the value created
thereby. The Ginkgo Collaboration Agreement provides that, subject to certain exceptions, all third party contracts for the development
of chemical small molecule compounds whose manufacture is enabled by the use of microbial strains and fermentation technologies
that are entered into by the Company or Ginkgo during the term of the Ginkgo Collaboration Agreement will be subject to the Collaboration
and the approval of the other party (not to be unreasonably withheld). Responsibility for the engineering and small-scale process
development of the newly developed products will be allocated between the parties on a project-by-project basis, and the Company
will be principally responsible for the commercial scale-up and production of such products, with each party generally bearing
their own respective costs and expenses relating to the Collaboration, including capital expenditures. Notwithstanding the foregoing,
subject to the Company sourcing funding and breaking ground on a new production facility by March 30, 2017, Ginkgo will pay the
Company a fee of $5 million on or before March 31, 2017.

Under the Ginkgo Collaboration Agreement, subject
to certain exceptions, including excluded or refused products and cost savings initiatives, the profit on the sale of products
subject to the Ginkgo Collaboration Agreement as well as cost-sharing, milestone and “value-creation” payments associated
with the development and production of such products will be shared equally between the parties. The parties also agreed to provide
each other with a license and other rights to certain intellectual property necessary to support the development and manufacture
of the products under the Collaboration, and also to provide each other with access to certain other intellectual property useful
in connection with the activities to be undertaken under the Ginkgo Collaboration Agreement, subject to certain carve-outs.

The initial term of the Ginkgo Collaboration
Agreement is three years, and will automatically renew for successive one-year terms unless either party provides written notice
of termination not less than 90 days prior to the expiration of the then-current term, subject to the right of the parties to terminate
the Ginkgo Collaboration Agreement by mutual agreement, in the event of a material breach by the other party, or in the event the
other party undergoes a change of control. In addition, the Ginkgo Collaboration Agreement provides that the parties will evaluate
the performance of the Collaboration as of the 18-month anniversary of the Ginkgo Collaboration Agreement, and if either party
has been repeatedly unable to perform or meet its commitments under the Ginkgo Collaboration Agreement, the other party will have
the right to terminate the Ginkgo Collaboration Agreement on 30 days written notice.

The Ginkgo Collaboration Agreement contains
customary representations and warranties of the parties, as well as customary terms and provisions regarding, among other things,
indemnification, dispute resolution, governing law and confidentiality.

See Note 18, “Subsequent Events”
for additional details regarding the amendment to the Company’s Senior Secured Loan Facility entered into in connection with
the execution of the Ginkgo Collaboration Agreement.

46

Financing Agreements

Bill & Melinda Gates Foundation Investment

On April 8, 2016, the Company entered into
a Securities Purchase Agreement with the Bill & Melinda Gates Foundation (the “Gates Foundation”), pursuant
to which the Company agreed to sell and issue 4,385,964 shares of its common stock to the Gates Foundation in a private placement
at a purchase price per share equal to $1.14, the average of the daily closing price per share of the Company’s common stock
on the NASDAQ Stock Market for the twenty consecutive trading days ending on April 7, 2016, for aggregate proceeds to the
Company of approximately $5,000,000 (the “Gates Foundation Investment”). The Securities Purchase Agreement includes
customary representations, warranties and covenants of the parties. The closing of the Gates Foundation Investment occurred
on May 10, 2016.

In connection with the entry into the Securities Purchase Agreement, on April 8, 2016, the Company and
the Gates Foundation entered into a Charitable Purposes Letter Agreement, pursuant to which the Company agreed to expend an aggregate
amount not less than the amount of the Gates Foundation Investment to develop a yeast strain that produces artemisinic acid and/or
amorphadiene at a low cost and to supply such artemisinic acid and amorphadiene to companies qualified to convert artemisinic acid
and amorphadiene to artemisinin for inclusion in artemisinin combination therapies used to treat malaria commencing in 2017. If
the Company defaults in its obligation to use the proceeds from the Gates Foundation Investment as set forth above or defaults
under certain other commitments in the Charitable Purposes Letter Agreement, the Gates Foundation will have the right to request
that the Company redeem, or facilitate the purchase by a third party of, the Gates Foundation Investment shares then held by the
Gates Foundation at a price per share equal to the greater of (i) the closing price of the Company’s common stock on the
trading day prior to the redemption or purchase, as applicable, or (ii) an amount equal to $1.14 plus a compounded annual return
of 10%. The funding received is classified as mezzanine equity.

See Note 5, “Debt” for details regarding the February
and June 2016 Private Placements.

At Market Issuance Sales Agreement

On March 8, 2016, the Company entered into an
At Market Issuance Sales Agreement (the “ATM Sales Agreement”) with FBR Capital Markets & Co. and MLV & Co.
LLC (the “Agents”) under which the Company may issue and sell shares of its common stock having an aggregate offering
price of up to $50.0 million (the “ATM Shares”) from time to time through the Agents, acting as its sales agents, under
the Company’s Registration Statement on Form S-3 (File No. 333-203216), effective April 15, 2015. Sales of the ATM Shares
through the Agents, if any, will be made by any method that is deemed an “at the market offering” as defined in Rule
415 under the Securities Act, including by means of ordinary brokers’ transactions at market prices, in block transactions,
or as otherwise agreed by the Company and the Agents. Each time that the Company wishes to issue and sell ATM Shares under the
ATM Sales Agreement, the Company will notify one of the Agents of the number of ATM Shares to be issued, the dates on which such
sales are anticipated to be made, any minimum price below which sales may not be made and other sales parameters as the Company
deems appropriate. The Company will pay the designated Agent a commission rate of up to 3.0% of the gross proceeds from the sale
of any ATM Shares sold through such Agent as agent under the ATM Sales Agreement. The ATM Sales Agreement contains customary terms,
provisions, representations and warranties. The ATM Sales Agreement includes no commitment by other parties to purchase shares
the Company offers for sale.

47

During the nine months ended September 30, 2016,
the Company did not sell any shares of common stock under the ATM Sales Agreement. As of the date hereof, $50.0 million remained
available for future sales under the ATM Sales Agreement.

9. Goodwill and Intangible Assets

The following table presents the components
of the Company's intangible assets (in thousands):

September 30, 2016

December 31, 2015

Useful Life
in Years

Gross
Carrying
Amount

Accumulated
Amortization/
Impairment

Net
Carrying
Value

Gross
Carrying
Amount

Accumulated
Amortization/
Impairment

Net
Carrying
Value

In-process research and development

Indefinite

$

8,560

$

(8,560

)

$

—

$

8,560

$

(8,560

)

$

—

Acquired licenses and permits

2

772

(772

)

—

772

(772

)

—

Goodwill

Indefinite

560

—

560

560

—

560

$

9,892

$

(9,332

)

$

560

$

9,892

$

(9,332

)

$

560

The in-process research and development (IPR&D)
of $8.6 million was acquired through the acquisition of Draths in October 2011 and was treated as indefinite lived intangible assets
pending completion or abandonment of the projects to which the IPR&D related. The IPR&D was fully impaired in 2015.

The Company has a single reportable segment
(see Note 15, “Reporting Segments” for further details). Consequently, all of the Company's goodwill is attributable
to that single reportable segment.

10. Stockholders’ Deficit

Unexercised Common Stock Warrants

As of September 30, 2016 and 2015, the
Company had 14,663,411 and 50,699,368, respectively, of unexercised common stock warrants with exercise prices ranging from $0.01
to $10.67 per warrant and a weighted average remaining maturity of 5.9 years.

48

11. Stock-Based Compensation

The Company’s stock option activity and
related information for the nine months ended September 30, 2016 was as follows:

Number
Outstanding

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Life (Years)

Aggregate
Intrinsic
Value

(in thousands)

Outstanding - December 31, 2015

12,930,112

$

4.77

7.39

$

22

Options granted

3,324,775

$

0.58

—

—

Options exercised

(134

)

$

0.28

—

—

Options cancelled

(2,393,835

)

$

5.59

—

—

Outstanding - September 30, 2016

13,860,918

$

3.62

7.27

$

—

Vested and expected to vest after September 30, 2016

12,598,270

$

3.86

7.08

$

—

Exercisable at September 30, 2016

6,788,182

$

5.84

5.47

$

—

The aggregate intrinsic value of options exercised under all option plans was $0.0 million for each of the
three months ended September 30, 2016 and 2015, and $0.0 million for each of the nine months ended September 30, 2016 and
2015, determined as of the date of option exercise.

The Company’s restricted stock units (or
"RSUs") and restricted stock activity and related information for the nine months ended September 30, 2016 was as
follows:

RSUs

Weighted-
Average Grant-
Date Fair Value

Weighted Average
Remaining
Contractual Life
(Years)

Outstanding - December 31, 2015

5,554,844

$

2.03

1.61

Awarded

4,374,389

$

0.60

—

Vested

(1,467,569

)

$

2.19

—

Forfeited

(987,109

)

$

1.49

—

Outstanding - September 30, 2016

7,474,555

$

1.23

1.52

Expected to vest after September 30, 2016

5,898,952

$

2.72

1.39

49

The following table summarizes information about
stock options outstanding as of September 30, 2016:

Options
Outstanding

Options Exercisable

Exercise Price

Number of Options

Weighted-
Average
Remaining
Contractual Life
(Years)

Weighted-Average
Exercise Price

Number of Options

Weighted-Average
Exercise Price

$0.28

—

$0.57

372,754

9.71

$

0.43

3,254

$

0.28

$0.59

—

$0.59

2,574,375

9.62

$

0.59

—

$

—

$0.81

—

$1.73

2,063,938

8.94

$

1.64

166,987

$

1.61

$1.75

—

$1.96

1,546,638

8.48

$

1.91

536,904

$

1.90

$1.98

—

$2.81

1,393,357

6.43

$

2.61

1,079,929

$

2.66

$2.85

—

$3.44

1,369,225

6.49

$

3.02

1,137,340

$

3.01

$3.51

—

$3.51

1,577,760

7.33

$

3.51

970,489

$

3.51

$3.55

—

$4.31

1,761,134

3.86

$

3.97

1,691,542

$

3.98

$4.35

—

$26.84

1,141,737

3.94

$

17.59

1,141,737

$

17.59

$30.17

—

$30.17

60,000

4.45

$

30.17

60,000

$

30.17

$0.28

—

$30.17

13,860,918

7.27

$

3.62

6,788,182

$

5.84

Stock-Based Compensation Expense

Stock-based compensation expense related to options and restricted stock units granted to employees was allocated
to research and development expense and sales, general and administrative expense as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Research and development

$

481

$

530

$

1,457

$

1,776

Sales, general and administrative

1,327

1,726

4,191

5,188

Total stock-based compensation expense

$

1,808

$

2,256

$

5,648

$

6,964

As of September 30, 2016, there was unrecognized
compensation expense of $5.2 million and $6.0 million related to stock options and RSUs, respectively. The Company expects to
recognize this expense over a weighted average period of 2.86 years and 2.72 years, respectively.

50

Stock-based compensation expense for RSUs is
measured based on the closing fair market value of the Company's common stock on the date of grant. Stock-based compensation expense
for stock options and employee stock purchase plan rights is estimated at the grant date and offering date, respectively, based
on their fair-value using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on
a straight-line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using
the following weighted-average assumptions:

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Expected dividend yield

—

%

—

%

—

%

—

%

Risk-free interest rate

1.2

%

2

%

1.32

%

2

%

Expected term (in years)

6.16

6.03

6.23

6.00

Expected volatility

76.7

%

74

%

73

%

74

%

Expected Dividend Yield
—The Company
has never paid dividends and does not expect to pay dividends.

Risk-Free Interest Rate
—The risk-free
interest rate was based on the market yield currently available on United States Treasury securities with maturities approximately
equal to the option’s expected term.

Expected Term
—Expected term represents
the period that the Company’s stock-based awards are expected to be outstanding. The Company’s assumptions about the
expected term have been based on that of companies that have similar industry, life cycle, revenue, and market capitalization and
the historical data on employee exercises.

Expected Volatility
—The expected
volatility is based on a combination of historical volatility for the Company's stock and the historical stock volatilities of
several of the Company’s publicly listed comparable companies over a period equal to the expected terms of the options, as
the Company does not have a long trading history.

Forfeiture Rate
—The Company estimates
its forfeiture rate based on an analysis of its actual forfeitures and will continue to evaluate the adequacy of the forfeiture
rate based on actual forfeiture experience, analysis of employee turnover behavior, and other factors. The impact from a forfeiture
rate adjustment will be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs
from that estimated by the Company, the Company may be required to record adjustments to stock-based compensation expense in future
periods.

Each of the inputs discussed above is subjective
and generally requires significant management and director judgment.

12. Employee Benefit Plan

The Company established a 401(k) Plan to provide
tax deferred salary deductions for all eligible employees. Participants may make voluntary contributions to the 401(k) Plan up
to 90% of their eligible compensation, limited by certain Internal Revenue Service (or the "IRS") restrictions. Effective
January 2014, the Company implemented a discretionary employer match plan whereby the Company will match employee contributions
up to the IRS limit or 90% of compensation, with a minimum one year of service required for vesting. The total matching amount
for each of the three months ended September 30, 2016 and 2015 was $0.1 million and $0.1 million, respectively, and $0.3 million
and $0.4 million for the nine months ended September 30, 2016 and 2015, respectively.

13. Related Party Transactions

Related Party Financings

See Note 5, “Debt” for a description
of the June 2016 Private Placement transaction with Foris Ventures, LLC, a related party of the Company, the February 2016 Private
Placement transaction with Foris Ventures, LLC, Naxyris S.A. and Biolding SA, each a related party of the Company, and the March
2016 R&D Note transaction with Total. In addition, see Note 18, “Subsequent Events” for descriptions of additional
related party financings subsequent to September 30, 2016.

As of September 30, 2016 and December 31, 2015, convertible notes and loans with related parties
were outstanding in aggregate amount of $63.5 million and $43.0 million, respectively, net of debt discount and issuance costs
of $2.6 million and $1.9 million, respectively.

51

The fair value of the derivative liability related to the related party convertible notes as of September 30,
2016 and December 31, 2015 was $1.9 million and $7.9 million, respectively. The Company recognized a loss from change in fair
value of the derivative instruments of $0.6 million and $12.4 million for the three months ended September 30, 2016 and September
2015, respectively, and a gain from change in fair value of the derivative instruments of $7.7 million for the nine months ended
September 30, 2016 and a loss from change in fair value of the derivative instruments of $0.7 million for the nine months ended
September 30, 2015, respectively (see Note 3, "Fair Value of Financial Instruments" for further details).

Related Party Revenues

The Company recognized related party revenues
from product sales to Total of zero and $2,000 for the three months ended September 30, 2016 and 2015, respectively, and zero and
$2,000 for the nine months ended September 30, 2016 and 2015, respectively. Related party accounts receivable from Total as of
September 30, 2016 and December 31, 2015, were $0.7 million and $1.2 million, respectively.

The Company recognized related party revenues
from product sales to Novvi of $1.4 million and zero for the three months ended September 30, 2016 and 2015, respectively, and
$1.4 million and zero for the nine months ended September 30, 2016 and 2015, respectively. Related party accounts receivable from
Novvi as of September 30, 2016 and December 31, 2015, were $0.0 million and $0.5 million, respectively.

Loans to Related Parties

See Note 7, "Joint Ventures and Noncontrolling
Interest" for details of the Company's transactions with its affiliate, Novvi LLC.

Joint Venture with Total

In November 2013, the Company and Total formed
TAB as discussed above under Note 7, "Joint Ventures and Noncontrolling Interest."

Pilot Plant Agreements

In May 2014, the Company received the final consents necessary for a Pilot Plant Services Agreement (or the
“Pilot Plant Services Agreement”) and a Sublease Agreement (or the “Sublease Agreement”), each dated as
of April 4, 2014 (collectively the “Pilot Plant Agreements”), between the Company and Total. The Pilot Plant Agreements
generally have a term of five years. Under the terms of the Pilot Plant Services Agreement, the Company agreed to provide
certain fermentation and downstream separations scale-up services and training to Total in exchange for an aggregate annual fee
payable by Total for all services in the amount of up to approximately $0.9 million per annum. In July 2015, Total and the Company
entered into Amendment #1 to the Pilot Plant Services Agreement (or the "Pilot Plant Agreement Amendment"), whereby the
Company agreed to waive a portion of these fees, up to approximately $2.0 million, over the term of the Pilot Plant Services Agreement
in connection with the restructuring of TAB discussed above in Note 7, "Joint Ventures and Non-controlling Interest."
Under the Sublease Agreement, the Company receives an annual base rent payable by Total of approximately $0.1 million per annum.

As of September 30, 2016, the Company had
received $1.7 million in cash under the Pilot Plant Agreements from Total. In connection with these arrangements, sublease payments
and service fees of $0.1 million and $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and $0.3
million and $0.8 million for the nine months ended September 30, 2016 and 2015, respectively, were offset against costs and operating
expenses.

52

14. Income Taxes

The Company recorded a provision for income
taxes of $0.1 million for each of the three months ended September 30, 2016 and 2015, and $0.4 million for each of the nine months
ended September 30, 2016 and 2015. The provision for income taxes for the nine months ended September 30, 2016 and 2015 consisted
of an accrual of Brazilian withholding tax on interest on inter-company loans. Other than the above mentioned provision for income
tax, no additional provision for income taxes has been made, net of the valuation allowance, due to cumulative losses since the
commencement of the Company's operations.

On December 15, 2011, the IRS completed its
audit of the Company for tax year 2008 which concluded that there were no adjustments resulting from the audit. While the statutes
are closed for tax year 2008, the US federal tax carryforwards (net operating losses and tax credits) may be adjusted by the IRS
in the year in which the carryforward is utilized.

15. Reporting Segments

The chief operating decision maker for the Company
is the chief executive officer. The chief executive officer reviews financial information presented on a consolidated basis, accompanied
by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance. The
Company has one business activity comprised of research and development and sales of fuels and farnesene-derived products and there
are no segment managers who are held accountable for operations, operating results or plans for levels or components below the
consolidated unit level. Accordingly, the Company has determined that it has a single reportable segment and operating segment
structure.

Revenues by geography are based on the location
of the customer. The following tables set forth revenue and long-lived assets by geographic area (in thousands):

Revenues

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Europe

$

1,899

$

459

$

10,527

$

2,138

United States

20,461

6,177

27,869

15,550

Asia

4,126

991

6,039

2,769

Brazil

46

964

467

3,850

Other

12

—

52

—

Total

$

26,544

$

8,591

$

44,954

$

24,307

Long-Lived Assets (Property, Plant and
Equipment)

September 30, 2016

December 31, 2015

Brazil

$

47,348

$

41,093

United States

15,489

18,401

Europe

256

303

Total

$

63,093

$

59,797

16. Comprehensive Loss

Comprehensive loss represents all changes in
stockholders’ deficit except those resulting from investments or contributions by stockholders. The Company’s foreign
currency translation adjustments represent the components of comprehensive loss excluded from the Company’s net loss and
have been disclosed in the condensed consolidated statements of comprehensive loss for the periods presented.

The components of accumulated other comprehensive
loss are as follows (in thousands):

September 30, 2016

December 31, 2015

Foreign currency translation adjustment, net of tax

$

(39,801

)

$

(47,198

)

Total accumulated other comprehensive loss

$

(39,801

)

$

(47,198

)

53

17. Net Loss Attributable to Common Stockholders and Net Loss
per Share

The Company computes net loss per share
in accordance with ASC 260, “Earnings per Share.” Basic net loss per share of common stock is computed by
dividing the Company’s net loss attributable to Amyris, Inc. common stockholders by the weighted average number of
shares of common stock outstanding during the period. Diluted net loss per share of common stock is computed by giving effect
to all potentially dilutive securities, including stock options, restricted stock units, common stock warrants and
convertible promissory notes using the treasury stock method or the as converted method, as applicable. For all periods
presented below, other than the nine months ended September 30, 2016, basic net loss per share was the same as diluted net
loss per share because the inclusion of all potentially dilutive securities outstanding was anti-dilutive. As such, the
numerator and the denominator used in computing both basic and diluted net loss was the same for those periods.

The following table presents the calculation
of basic and diluted net loss per share of common stock attributable to Amyris, Inc. common stockholders (in thousands, except
share and per share amounts):

The following outstanding shares of potentially
dilutive securities were excluded from the computation of diluted net loss per share of common stock because including them would
have been anti-dilutive:

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Period-end stock options to purchase common stock

13,860,918

11,307,679

13,860,918

11,307,679

Convertible promissory notes
(1)

66,474,148

43,451,433

23,760,389

43,451,433

Period-end common stock warrants

14,663,411

2,901,926

14,663,411

2,901,926

Period-end restricted stock units

7,474,555

3,558,243

7,474,555

3,558,243

Total

102,473,032

61,219,281

59,759,273

61,219,281

______________

(1)

The
potentially dilutive effect of convertible promissory notes was computed based on conversion
ratios in effect as of the respective period end dates. A portion of the convertible
promissory notes issued carries a provision for a reduction in conversion price under
certain circumstances, which could potentially increase the dilutive shares outstanding.
Another portion of the convertible promissory notes issued carries a provision for an
increase in the conversion rate under certain circumstances, which could also potentially
increase the dilutive shares outstanding.

18. Subsequent Events

Senior Secured Loan Facility Amendment

On October 6, 2016, in connection with the entry into the Ginkgo Collaboration Agreement, the Company, certain
of its subsidiaries and Stegodon, an affiliate of Ginkgo, entered into a fourth amendment of the Senior Secured Loan Facility.
Pursuant to the fourth amendment, subject to the Company extending (or the “Extension Condition”) the maturity of the
Fidelity Notes, the parties agreed to extend the maturity date of all outstanding loans under the Senior Secured Loan Facility
to the business day immediately preceding the earliest maturity of the Fidelity Notes and the outstanding Tranche Notes held by
non-affiliates, after giving effect to any extensions thereof at or prior to the satisfaction of the Extension Condition, but in
no event later than April 12, 2019. In addition, the parties agreed that the Company would be required to pay only the interest
accruing on all outstanding loans under the Senior Secured Loan Facility until the maturity date, provided that the Company would
be required to apply certain monies received by the Company under the Ginkgo Collaboration Agreement towards repayment of the outstanding
loans under the Senior Secured Loan Facility, up to a maximum amount of $1 million per month. Furthermore, pursuant to the fourth
amendment, Stegodon agreed to waive the Minimum Cash Covenant under the Senior Secured Loan Facility until the maturity date. See
Note 5, “Debt” for additional details regarding the Senior Secured Loan Facility and Note 8, “Significant Agreements”
for additional information regarding the Ginkgo Collaboration Agreement.

2016 Convertible Note Offering

On October 13, 2016, the Company issued and
sold the $2.0 Million Note under the May 2016 Purchase Agreement to the purchaser, for proceeds to the Company of $2.0 million.
Upon the issuance of the $2 Million Note, all 2016 Convertible Notes provided for under the May 2016 Purchase Agreement had been
issued and sold. See Note 5, “Debt” for additional information regarding the May 2016 Purchase Agreement and the 2016
Convertible Notes.

October 2016 Private Placements

On October 21 and October 27, 2016, the Company
entered into separate Note Purchase Agreements (or the “October 2016 Purchase Agreements”) with Foris Ventures, LLC
and Ginkgo Bioworks, Inc., respectively, for the sale of $6.0 million and $8.5 million, respectively, in aggregate principal amount
of secured promissory notes (or the “October 2016 Private Notes”) in exchange for aggregate proceeds to the Company
of $6.0 million and $8.5 million, respectively (or the “October 2016 Private Placements”). The October 2016 Private
Notes were issued in private placements pursuant to the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended and Regulation D promulgated under the Securities Act. The October 2016 Private Placements closed on October 21
and October 27, 2016, respectively.

55

The October 2016 Private Notes are collateralized
by a second priority lien on the assets securing the Company’s obligations under the Senior Secured Loan Facility, and are
subordinate to the Company’s obligations under the Senior Secured Loan Facility pursuant to Subordination Agreements, dated
as of the respective dates of the October 2016 Purchase Agreements, by and among the Company, the applicable purchaser and the
administrative agent under the Company’s Senior Secured Loan Facility. Interest will accrue on the October 2016 Private Notes
from and including October 21 and 27, 2016, respectively, at a rate of 13.50% per annum and is payable in full on May 15, 2017,
the maturity date of the October 2016 Private Notes, unless the October 2016 Private Notes are prepaid in accordance with their
terms prior to such date. The October 2016 Purchase Agreements and the October 2016 Private Notes contain customary terms, provisions,
representations and warranties, including certain events of default after which the October 2016 Private Notes may be due and payable
immediately, as set forth in the October 2016 Private Notes.

Guanfu Credit Agreement

On October 26, 2016, the Company and Guanfu
Holding Co., Ltd. (or, together with its subsidiaries, “Guanfu”), an existing commercial partner of the Company, entered
into a credit agreement (or the “Guanfu Credit Agreement”) to make available to the Company an unsecured credit facility
with an aggregate principal amount of up to $25.0 million (or the “Guanfu Credit Facility”), which the Company
may borrow from time to time in up to three closings (each such borrowing, a “Guanfu Loan”). Each Guanfu Loan will
have a term of five years and will accrue interest at a rate of 10% per annum, payable quarterly. The Company may at its option
repay the Guanfu Loans before their maturity date, in whole or in part, at a price equal to 100% of the amount being repaid plus
accrued and unpaid interest on such amount to the date of repayment.

The Guanfu Credit Agreement contains customary
representations, warranties and covenants of the parties, as well as customary provisions regarding, among other things, dispute
resolution and governing law. Upon the occurrence of certain specified events of default under the Guanfu Credit Facility, the
Company will grant to Guanfu an exclusive, royalty-free, global license to certain intellectual property useful in connection with
Guanfu’s existing commercial relationship with the Company. In addition, in the event the Company fails to pay interest or
principal under any Guanfu Loan within ten days of when due, the Company will also be required, subject to applicable laws and
regulations, to repay the outstanding principal amount under such Guanfu Loan, together with accrued and unpaid interest, in the
form of shares of the Company’s common stock at a per share price equal to 90% of the volume weighted average closing sale
price of the Company’s common stock for the 90 trading days ending on and including the trading day that is two trading days
preceding such default.

The effectiveness of the Guanfu Credit Agreement
is subject to the parties obtaining certain required approvals, and upon the effective date of the Guanfu Credit Agreement, the
Company will grant to Guanfu the global exclusive purchase right with respect to the Company products subject to the parties’
pre-existing commercial relationship. The initial funding of the Guanfu Credit Facility is scheduled to occur on December 1, 2016,
subject to Guanfu’s right to extend such initial funding to a date no later than December 31, 2016.

Nenter Cooperation Agreement

On October 26, 2016, the Company entered into
a Cooperation Agreement (or the “Cooperation Agreement”) with Nenter & Co., Inc. (or “Nenter”), a subsidiary
of Guanfu. Under the Cooperation Agreement, the parties will collaborate to create and develop certain compounds and, in the event
the parties achieve certain specified development targets, the parties would establish and implement a worldwide manufacturing
and commercialization plan (or the “Commercialization Plan”) relating thereto. The term of the Cooperation Agreement
will be two years from the effectiveness of the Cooperation Agreement (or five years in the event the parties pursue the Commercialization
Plan), which will occur upon the parties obtaining certain required approvals, subject to the rights of the parties to terminate
the Cooperation Agreement upon a material breach by the other party or the failure to obtain certain governmental approvals or
authorizations, as provided in the Cooperation Agreement. The Cooperation Agreement also contains customary representations, warranties
and covenants of the parties, as well as customary terms and provisions regarding, among other things, indemnification, dispute
resolution, confidentiality and governing law.

In addition, pursuant to the terms of, and as
consideration for, the Cooperation Agreement, promptly after the effectiveness of the Cooperation Agreement, the Company will issue
to Nenter a warrant to purchase 10 million shares of the Company’s common stock at an exercise price of $0.50 per share,
exercisable on or before December 31, 2016. The warrant will be issued pursuant to the exemption from registration under Section
4(2) of the Securities Act and Regulation D promulgated under the Securities Act. Furthermore, pursuant to the terms of the warrant,
upon the request of Nenter, the Company will use its best efforts to cause the shares of common stock issued upon exercise of the
warrant to be registered under the Securities Act within 90 days of the exercise of the warrant.

56

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion and analysis should
be read in conjunction with our condensed consolidated financial statements and the related notes that appear elsewhere in this
Form 10-Q. These discussions contain forward-looking statements reflecting our current expectations that involve risks and uncertainties
which are subject to safe harbors under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange
Act of 1934, as amended, or the Exchange Act. These forward looking statements include, but are not limited to, statements concerning
our strategy of achieving a significant reduction in net cash outflows in 2016, future production capacity and other aspects of
our future operations, ability to improve our production efficiencies, future financial position, future revenues, projected costs,
expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the market in which we operate,
prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “may,” “plans,” “projects,” “will,”
“would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our
forward-looking statements and you should not place undue reliance on our forward looking statements. These forward-looking statements
involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements,
including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors,” in this Quarterly Report on
Form 10-Q and in our other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking
statements.

Trademarks

Amyris, the Amyris logo, Biofene, Biossance,
Dial-A-Blend, Diesel de Cana, Evoshield, µPharm, Muck Daddy, Myralene, Neossance and No Compromise are trademarks or registered
trademarks of Amyris, Inc. This report also contains trademarks and trade names of other businesses that are the property of their
respective holders.

Overview

Amyris, Inc. (referred to as the “Company,”
“Amyris,” “we,” “us,” or “our”) is a leading integrated industrial biotechnology
company applying its technology platform to engineer, manufacture and sell high performance, low cost products into a variety of
consumer and industrial markets, including cosmetics, flavors & fragrances (or F&F), solvents and cleaners, polymers, lubricants,
healthcare products and fuels, and we are seeking to apply our technology to the development of pharmaceutical products. Our proven
technology platform allows us to rapidly engineer microbes and use them as living factories to metabolize renewable, plant-sourced
sugars into large volume, high-value hydrocarbon molecules. Using yeast as these living factories, our industrial fermentation
process replaces existing complex and expensive chemical manufacturing processes. We believe industrial synthetic biology represents
a third industrial revolution, bringing together biology and engineering to generate new, more sustainable materials to meet the
growing global demand for bio-based replacements for petroleum, animal-or plant-derived chemicals. We continue to work to build
demand for our current portfolio of products through a network of distributors and through direct sales, and are engaged in collaborations
across a variety of markets, including personal care, performance chemicals and industrials, to drive additional product sales
and partnership opportunities.

Amyris was founded in 2003 in the San Francisco
Bay Area by a group of scientists from the University of California, Berkeley. Our first major milestone came in 2005 when, through
a grant from the Bill & Melinda Gates Foundation, we developed technology capable of creating microbial strains that produce
artemisinic acid - a precursor of artemisinin, an effective anti-malarial drug. In 2008, we granted royalty-free licenses to allow
Sanofi-Aventis (or "Sanofi") to produce artemisinic acid using our technology. Since 2013, Sanofi has been distributing
millions of artemisinin-based anti-malarial treatments incorporating this artemisinic acid. Building on our success with artemisinic
acid, in 2007 we began applying our technology platform to develop, manufacture and sell sustainable alternatives to a broad range
of materials.

57

We focused our initial development efforts primarily
on the production of Biofene
®
, our brand of renewable farnesene, a long-chain, branched hydrocarbon molecule that
we manufacture through fermentation using engineered microbes. Using farnesene as a first commercial building block molecule, we
have developed a wide range of renewable products for our various target markets, including cosmetics, F&F, healthcare products
and fuels, and we are pursuing opportunities for the application of our technology in the pharmaceuticals market. Our technology
platform allows us to rapidly develop microbial strains to produce other target molecules, and, in 2014, we began manufacturing
additional molecules for the F&F industry.

Amyris’ proprietary microbial engineering
and screening technologies have industrialized bioengineering of microbes, and most of our efforts to date have been focused on
engineering yeast. Our platform provides predictable and efficient “living factories” that allow us to convert plant-sourced
sugars, primarily sugarcane syrup, through fermentation, into high-value hydrocarbon molecules instead of low-value alcohol. We
are able to use a wide variety of feedstocks for production, but have focused on accessing Brazilian sugarcane for our large-scale
production because of its renewability, low cost and relative price stability. We have also successfully used other feedstocks
such as sugar beets, corn dextrose, sweet sorghum and cellulosic sugars at various manufacturing facilities.

We are currently producing four molecules at
our industrial fermentation plant: artemisinic acid, farnesene and two fragrance molecules. We and our partners develop products
from these molecules for several target markets, including cosmetics, F&F, solvents, polymers, industrials and healthcare products,
and we are pursuing arrangements with a number of drug companies for their use of our molecules to develop pharmaceutical products.
We are engaged in collaborations with multiple companies that are leaders within their respective markets, including affiliates
of Total S.A., the international energy company (or “Total”), and worldwide leaders in specialty chemicals, consumer
care, F&F, food ingredients and health, and who sell our ingredients to hundreds of brands that serve millions of consumers.

Our mission is to apply inspired science to
deliver sustainable solutions for a growing world. We seek to become the world’s leading provider of renewable, high-performance
alternatives to non-renewable products. In the past, choosing a renewable product often required producers to compromise on performance
or price. With our technology, leading consumer brands can develop products made from renewable sources that offer equivalent or
better performance and stable supply with competitive pricing. We call this our No Compromise
®
value proposition.
We aim to improve the world one molecule at a time by providing the best alternatives to non-renewable products.

We have developed and are operating our company
under a business model that generates cash from both collaborations and from product sales. We believe this combination will enable
us to realize our vision of becoming the world’s leading renewable products company.

Relationship with Total

In July 2012 and December 2013, we entered into a series of agreements (or the “Total Fuel Agreements”)
to establish a research and development program and form a joint venture with Total Energies Nouvelles Activités USA (formerly
known as Total Gas & Power USA, SAS, and, together with its affiliates, referred to as “Total”) to produce and
commercialize farnesene- or farnesane-based diesel and jet fuels, and formed such joint venture, Total Amyris BioSolutions B.V.
(or “TAB”), in November 2013. With an exception for our fuels business in Brazil, the collaboration and joint venture
established the exclusive means for us to develop, produce and commercialize farnesene- or farnesane-based diesel and jet fuels.
We initially granted TAB exclusive licenses under certain of our intellectual property to make and sell joint venture products.
We also granted TAB, in the event of a buy-out of our interest in the joint venture by Total (which Total was entitled to do under
certain circumstances), a non-exclusive license to optimize or engineer yeast strains used by us to produce farnesene for the joint
venture’s diesel and jet fuels. As a result of these licenses, we generally no longer had an independent right to make or
sell farnesene- or farnesane-based diesel and jet fuels fuels outside of Brazil without the approval of TAB.

In addition, our agreements with Total relating
to our fuels collaboration created a convertible debt financing structure for funding the research and development program. The
Total Fuel Agreements contemplated approximately $105.0 million in financing (or “R&D Notes”) for the collaboration,
which as of January 2015, had been completely funded by Total.

58

In July 2015, we entered into a Letter Agreement
with Total (or, as amended in February 2016, the “TAB Letter Agreement”) regarding the restructuring of the ownership
and rights of TAB (or the “Restructuring”), pursuant to which the parties agreed to enter into an Amended & Restated
Jet Fuel License Agreement between us and TAB (or the “Jet Fuel Agreement”), a License Agreement regarding Diesel Fuel
in the European Union (or the “EU”) between us and Total (or the “EU Diesel Fuel Agreement” and together
with the Jet Fuel Agreement, the “Commercial Agreements”), and an Amended and Restated Shareholders’ Agreement
among us, Total and TAB (or, together with the Commercial Agreements, the “Restructuring Agreements”), and file a Deed
of Amendment of Articles of Association of TAB, all in order to reflect certain changes to the ownership structure of TAB and license
grants and related rights pertaining to TAB.

Additionally, in connection with the proposed
Restructuring, in July 2015, we and Total entered into Amendment #1 (or the "Pilot Plant Agreement Amendment") to that
certain Pilot Plant Services Agreement dated as of April 4, 2014 (or, as amended, the "Pilot Plant Agreement") whereby
we and Total agreed to restructure the payment obligations of Total under the Pilot Plant Agreement. Under the Pilot Plant Agreement,
for a five year period, we are providing certain fermentation and downstream separations scale-up services and training to Total
and, as originally contemplated, we were to receive an aggregate annual fee payable by Total for all services in the amount of
up to approximately $900,000 per annum. Such annual fee was due in three equal installments payable on March 1, July 1 and November
1 each year during the term of the Pilot Plant Agreement. Under the Pilot Plant Agreement Amendment, in connection with the restructuring
of TAB discussed above, we agreed to waive a portion of these fees up to approximately $2.0 million, over the term of the Pilot
Plant Agreement.

On March 21, 2016, we, Total and TAB closed the Restructuring and
entered into the Restructuring Agreements.

Under the Jet Fuel Agreement, (a) we granted
exclusive (co-exclusive in Brazil), world-wide, royalty-free rights to TAB for the production and commercialization of farnesene-
or farnesane-based jet fuel, (b) we granted TAB the option, until March 1, 2018, to purchase our Brazil jet fuel business at a
price based on the fair value of the commercial assets and on our investment in other related assets, (c) we granted TAB the right
to purchase farnesene or farnesane for its jet fuel business from us on a “most-favored” pricing basis and (d) all
rights to farnesene- or farnesane-based diesel fuel previously granted to TAB by us reverted back to us.

Upon all farnesene- or farnesane-based diesel
fuel rights reverting back to us, we granted to Total, pursuant to the EU Diesel Fuel Agreement, (a) an exclusive, royalty-free
license to offer for sale and sell farnesene- or farnesane-based diesel fuel in the EU, (b) the non-exclusive right to make farnesene
or farnesane anywhere in the world, but Total must (i) use such farnesene or farnesane to produce only diesel fuel to offer for
sale or sell in the EU and (ii) pay us a to-be-negotiated, commercially reasonable, “most-favored” basis royalty and
(c) the right to purchase farnesene or farnesane for its EU diesel fuel business from us on a “most-favored” pricing
basis.

As a result of these licenses, we generally
no longer have an independent right to make or sell, without the approval of Total, farnesene- or farnesane-based jet fuels outside
of Brazil or farnesane-based diesel fuels in the EU.

In addition, as part of the closing of the Restructuring
and pursuant the TAB Letter Agreement, on March 21, 2016, we sold to Total one half of our ownership stake in TAB (giving Total
an aggregate ownership stake of 75% of TAB and giving us an aggregate ownership stake of 25% of TAB) in exchange for Total cancelling
(i) approximately $1.3 million of R&D Notes, plus all paid-in-kind and accrued interest under all outstanding R&D Notes
(including all such interest that was outstanding as of July 29, 2015) and (ii) a note in the principal amount of Euro 50,000,
plus accrued interest, issued to Total in connection with the original TAB capitalization. To satisfy its purchase obligation above,
Total surrendered to us the remaining R&D Note of approximately $5 million in principal amount, and we executed and delivered
to Total a new, senior convertible note, containing substantially similar terms and conditions other than it is unsecured and its
payment terms are severed from TAB’s business performance, in the principal amount of $3.7 million.

As a result of, and in order to reflect, the
changes to the ownership structure of TAB described above, on March 21, 2016, (a) we, Total and TAB entered into an Amended and
Restated Shareholders’ Agreement and filed a Deed of Amendment of Articles of Association of TAB and (b) we and Total terminated
the Amended and Restated Master Framework Agreement, dated December 2, 2013 and amended on April 1, 2015, between us and Total.
See Note 5, “Debt”, “Note 7, “Joint Ventures and Noncontrolling Interest” and Note 13, “Related
Party Transactions” for additional details regarding our relationship with Total.

59

Sales and Revenues

Our revenues are comprised of product revenues
and grants and collaborations revenues. We generate the substantial majority of our product revenues from sales to distributors
or collaborators and only a small portion from direct sales, although we have begun to market and sell some of our products directly
to end-consumers, initially in the cosmetics and industrial cleaning markets. To commercialize our initial Biofene-derived product,
squalane, in the cosmetics sector for use as an emollient, we have entered into certain marketing and distribution agreements in
Europe, Asia, and North America. As an initial step towards commercialization of Biofene-based diesel, we entered into agreements
with municipal fleet operators in Brazil. Pursuant to our agreements with Total, as discussed above, future commercialization of
our jet fuel products outside of Brazil and our diesel fuel products in the EU would generally occur exclusively through certain
agreements entered into by and among Amyris, Total and TAB. For the industrial lubricants market, we established a joint venture
with Cosan U.S. for the worldwide development, production and commercialization of renewable base oils in the lubricant sector.
We have also entered into certain supply agreements with customers in the F&F industry to commercialize products derived from
our fragrance molecules. In addition, we have entered into research and development collaboration arrangements pursuant to which
we receive payments from our collaborators, which include Total, Manufacture Francaise de Pnematiques Michelin, The Defense Advanced
Research Projects Agency, Givaudan International, SA and Cosan US, Inc. Some of such collaboration arrangements include advance
payments in consideration for grants of exclusivity or research efforts to be performed by us. Once a collaboration agreement has
been signed, receipt of payments may depend on our achievement of milestones. See Note 8, “Significant Agreements”
for more details regarding these agreements and arrangements.

Financing

In 2015, and through the third quarter of 2016, we completed multiple financings involving
loans, convertible debt, non-convertible debt, mezzanine equity and equity offerings.

In January 2015, we closed a second installment
of the $21.7 million in convertible notes from Total under the Total Fuel Agreements, as described in more detail in Note 5, "Debt"
to our unaudited condensed consolidated financial statements included in this report, in the amount of $10.85 million.

In July 2015, we sold to certain purchasers
16,025,642 shares of our common stock at a price per share of $1.56, for aggregate proceeds to us of $25 million. We also granted
to the purchasers warrants exercisable at an exercise price of $0.01 per share for the purchase of an aggregate of 1,602,562 shares
of our common stock. The exercisability of these warrants was subject to stockholder approval, which was obtained on September
17, 2015.

In October 2015, we issued $57.6 million aggregate
principal amount of 9.50% Convertible Senior Notes due 2019 to certain qualified institutional buyers, as described in more detail
in Note 5, “Debt” to our unaudited condensed consolidated financial statements included in this report.

In February 2016, we issued to certain purchasers
an aggregate of $20.0 million of unsecured promissory notes and warrants for the purchase, at an exercise price of $0.01 per share,
of an aggregate of 2,857,142 shares of our common stock, as described in more detail in Note 5, “Debt” to our unaudited
condensed consolidated financial statements included in this report. The exercisability of these warrants was subject to stockholder
approval, which was obtained on May 17, 2016.

In March 2016, we sold to Total one half of our ownership stake in
TAB in exchange for Total cancelling $1.3 million of R&D Notes and certain other indebtedness, as described in more detail
under “Relationship with Total” above and in Note 5, “Debt” and Note 7, “Joint Ventures and Noncontrolling
Interest” to our unaudited condensed consolidated financial statements included in this report.

60

In May 2016, we sold and issued 4,385,964 shares
of common stock to the Bill & Melinda Gates Foundation at a purchase price per share of $1.14, as described in more detail
in Note 8, “Significant Agreements.”

In May and September 2016, we sold and issued
$13.0 million in aggregate principal amount of convertible promissory notes to a private investor, as described in more detail
in Note 5, “Debt” to our unaudited condensed consolidated financial statements included in this report.

On July 29, 2015, we closed the "Exchange"
pursuant to that certain Exchange Agreement, dated as of July 26, 2015 (the “ Exchange Agreement ”), among us, Maxwell
(Mauritius) Pte Ltd (or “Temasek”) and Total.

Under the Exchange Agreement, at the closing,
Temasek exchanged approximately $71.0 million in principal of outstanding convertible promissory notes (including paid-in-kind
and accrued interest through July 29, 2015) and Total exchanged $70.0 million in principal amount of outstanding convertible promissory
notes for shares of the Company’s common stock. The exchange price was $2.30 per share (the “Exchange Price”)
and was paid by the exchange and cancellation of such outstanding convertible promissory notes, and Temasek and Total received
30,860,633 and 30,434,782 shares of the Company’s common stock, respectively, in the Exchange.

Under the Exchange Agreement, Total also received
the following warrants, each with a five-year term, at the closing:

•

A warrant to purchase 18,924,191 shares of our common stock (or the “Total Funding Warrant”).

•

A warrant to purchase 2,000,000 shares of our common stock that will only be exercisable if we fail, as
of March 1, 2017, to achieve a target cost per liter to manufacture farnesene (or the “Total R&D Warrant”). The
Total Funding Warrant and the Total R&D Warrant are collectively referred to as the “Total Warrants.”

Additionally, under the Exchange Agreement,
Temasek received the following warrants:

•

A warrant to purchase 14,677,861 shares of our common stock.

•

A warrant exercisable for that number of shares of our common stock equal to (1) (A) the number of shares
for which Total exercises the Total Funding Warrant plus (B) the number of additional shares for which the certain convertible
notes remaining outstanding following the completion of the Exchange may become exercisable as a result of a reduction in the conversion
price of such remaining notes as a result of and/or subsequent to the date of the Exchange plus (C) that number of additional shares
in excess of 2,000,000, if any, for which the Total R&D Warrant becomes exercisable multiplied by a fraction equal to 30.6%
divided by 69.4% plus (2) (A) the number of any additional shares for which certain other outstanding convertible promissory notes
may become exercisable as a result of a reduction to the conversion price of such notes multiplied by (B) a fraction equal to 13.3%
divided by 86.7% (or the “Temasek Funding Warrant”).

•

A warrant exercisable for that number of shares of our common stock equal to 880,339 multiplied by a fraction
equal to the number of shares for which Total exercises the Total R&D Warrant divided by 2,000,000. If Total is entitled to,
and does, exercise the Total R&D Warrant in full, this warrant would be exercisable for 880,339 shares (or the “Temasek
R&D Warrant”).

61

The Temasek Exchange Warrant, the Temasek Funding
Warrant and the Temasek R&D Warrant each have ten-year terms and are referred to herein as the “Temasek Warrants”
and, the Temasek Warrants and Total Warrants are hereinafter collectively referred to as the “Exchange Warrants”. All
of the Exchange Warrants have an exercise price of $0.01 per share.

In addition to the grant of the Exchange Warrants, a warrant issued by the Company to Temasek in October
2013 in conjunction with a prior convertible debt financing (or the “2013 Warrant”) became exercisable in full upon
the completion of the Exchange. There were 1,000,000 shares underlying the 2013 Warrant, which was exercised in full at the exercise
price of $0.01 per share.

The exercisability of all of the Exchange Warrants was subject to
stockholder approval, which was obtained on September 17, 2015.

In February and May 2016, as a result of the adjustments to the conversion price of our senior convertible
notes issued in October 2013 (or the “Tranche I Notes”) and January 2014 (or the “Tranche II Notes”) discussed
in Note 5, “Debt” to our unaudited condensed consolidated financial statements included in this report, the Temasek
Funding Warrant became exercisable for an additional 127,194 and 2,335,342 shares of common stock, respectively.

As of September 30, 2016, the Total Funding Warrant, the Temasek Exchange Warrant, and the 2013 Warrant had
been fully exercised, and Temasek had exercised the Temasek Funding Warrant with respect to 12,700,244 shares of our common stock.
Neither the Total R&D Warrant nor the Temasek R&D Warrant were exercisable as of September 30, 2016. Warrants to purchase
2,462,536 shares of common stock under the Temasek Funding Warrant were unexercised as of September 30, 2016.

Maturity Treatment Agreement

At the closing of the Exchange, we, Total and Temasek also entered into a Maturity Treatment Agreement, dated
as of July 29, 2015, pursuant to which Total and Temasek agreed to convert any of our convertible promissory notes held by them
that were not cancelled in the Exchange (or the “Remaining Notes”) into shares of our common stock in accordance with
the terms of such Remaining Notes upon maturity, provided that certain events of default have not occurred with respect to the
applicable Remaining Notes prior to such maturity. As of immediately following the closing of the Exchange and September 30, 2016,
Temasek held $10.0 million in aggregate principal amount of Remaining Notes and Total held approximately $25.0 million and $28.9
million, respectively, in aggregate principal amount of Remaining Notes.

Liquidity

We have incurred significant losses since our inception and believe that we will continue to incur losses
and negative cash flow from operations through at least 2017. As of September 30, 2016, we had an accumulated deficit of $1,085.7
million and had cash, cash equivalents and short term investments of $2.3 million. We have significant outstanding debt and contractual
obligations related to capital and operating leases, as well as purchase commitments. Refer to "Liquidity and Capital Resources"
for further details.

62

Results of Operations

Comparison of Three Months Ended September 30, 2016
and 2015

Revenues

Three Months Ended September 30,

Period-to-period
Change

Percentage
Change

2016

2015

(Dollars in thousands)

Revenues

Renewable product sales

$

5,430

$

4,226

$

1,204

28

%

Related party renewable product sales

1,390

2

$

1,388

69,400

%

Total product sales

6,820

4,228

2,592

61

%

Grants and collaborations revenues

19,724

4,363

15,361

352

%

Total revenues

$

26,544

$

8,591

$

17,953

209

%

Our total revenues increased by $18.0 million
to $26.5 million for the three months ended September 30, 2016, as compared to the same period in the prior year, primarily
due to a $15.4 million increase in grants and collaborations revenues.

Product sales increased by $2.6 million to
$6.8 million for the three months ended September 30, 2016, as compared to the same period in the prior year, primarily due
to the increases in product sales, primarily in the personal care segment.

Grants and collaborations revenues increased
by $15.4 million to $19.7 million for the three months ended September 30, 2016, as compared to the same period in the prior year,
primarily due to the collaboration revenue for the transfer of certain intellectual property to Ginkgo under the Ginkgo Collaboration
Agreement.

Cost and Operating Expenses

Three Months Ended September 30,

Period-to-period
Change

Percentage
Change

2016

2015

(Dollars in thousands)

Cost of products sold

$

14,876

$

8,455

$

6,421

76

%

Loss on purchase commitments and impairment of property, plant and equipment

—

7,259

(7,259

)

(100

)%

Research and development

12,315

10,343

1,972

19

%

Sales, general and administrative

11,381

14,103

(2,722

)

(19

)%

Total cost and operating expenses

$

38,572

$

40,160

$

(1,588

)

(4

)%

Our cost of products sold includes cost of raw materials, labor and overhead, amounts paid to contract manufacturers,
periodic costs related to inventory write-downs resulting from applying lower of cost or market inventory valuations, and costs
related to scale-up in production of such products. Our cost of products sold increased by $6.4 million to $14.9 million for the
three months ended September 30, 2016, as compared to the same period in the prior year, primarily driven by product mix,
higher inventory provisions and higher excess capacity charges based on timing of production at our manufacturing facilities, and
higher raw materials costs.

Research and Development Expenses

Our research and development expenses increased by $2.0 million to $12.3 million for the three months ended
September 30, 2016, as compared to the same period in the prior year, primarily as a result of increases of $0.4 million in
consulting and outside services expenses, $0.9 million from facilities expenses, $0.4 million related to technology access and
$0.3 million in salaries and benefits.

63

Sales, General and Administrative Expenses

Our sales, general and administrative expenses decreased by $2.7 million to $11.4 million for the three months
ended September 30, 2016, as compared to the same period in the prior year, primarily as a result of our cost reduction efforts.
The decrease was attributable to a $1.1 million reduction in consulting and outside services, $0.7 million reduction in facilities
expenses and $0.9 million reductions in salaries and benefits and depreciation expense.

Other Income (Expense)

Three Months Ended September 30,

Period-to-period
Change

Percentage
Change

2016

2015

(Dollars in thousands)

Other income (expense):

Interest income

$

68

$

61

$

7

11

%

Interest expense

(7,927

)

(16,559

)

8,632

(52)

%

Gain/(loss) from change in fair value of derivative instruments

(786

)

(21,690

)

20,904

(96

)%

Loss upon extinguishment of debt

(217

)

(5,984

)

5,767

(96

)%

Other income (expense), net

1,334

(168

)

1,502

(894

)%

Total other income (expense)

$

(7,528

)

$

(44,340

)

$

36,812

(83

)%

Total other expense decreased by approximately
$36.8 million to $7.5 million for the three months ended September 30, 2016, as compared to the same period in the prior year.
The decrease was primarily attributable to a $8.6 million decrease in interest expense due to lower accelerated interest accretion
and a decrease of $20.9 million in the loss from change in fair value of derivative instruments, attributed to the compound embedded
derivative liabilities associated with our senior convertible promissory notes and the change in fair value of our interest rate
swap derivative liability. The change was driven by fluctuation of various inputs used in the valuation models from one reporting
period to another, such as stock price, credit risk rate and estimated stock volatility.

Comparison of Nine Months Ended September 30, 2016
and 2015

Revenues

Nine Months Ended September 30,

Period-to-period
Change

Percentage
Change

2016

2015

(Dollars in thousands)

Revenues

Renewable product sales

$

13,493

$

9,661

$

3,832

40

%

Related party renewable product sales

1,390

2

1,388

69,400

%

Total product sales

14,883

9,663

5,220

54

%

Grants and collaborations revenues

30,071

14,643

15,428

105

%

Total revenues

$

44,954

$

24,306

$

20,648

85

%

Our total revenues increased by $20.6 million
to $45.0 million for the nine months ended September 30, 2016, as compared to the same period in the prior year, primarily
due to a $15.4 million increase in grants and collaborations revenues.

Product sales increased by $5.2 million to $14.9 million for the nine months ended September 30, 2016, as
compared to the same period in the prior year, primarily due to the increases in product sales led by personal care business.

64

Grants and collaborations revenues increased by $15.4 million to $30.1 million for the nine months ended September
30, 2016, primarily due to the collaboration revenue for the transfer of certain intellectual property to Ginkgo under the Ginkgo
Collaboration Agreement.

Cost and Operating Expenses

Nine Months Ended September 30,

Period-to-period
Change

Percentage
Change

2016

2015

(Dollars in thousands)

Cost of products sold

$

33,945

$

26,057

$

7,888

30

%

Loss on purchase commitments and impairment of property, plant and equipment

—

7,259

(7,259

)

(100

)%

Research and development

37,397

33,521

3,876

12

%

Sales, general and administrative

35,055

42,859

(7,804

)

(18

)%

Total cost and operating expenses

$

106,397

$

109,696

$

(3,299

)

(3

)%

Our cost of products sold includes cost of raw materials, labor and overhead, amounts paid to contract manufacturers,
period costs related to inventory write-downs resulting from applying lower of cost or market inventory valuations, and costs related
to scale-up in production of such products. Our cost of products sold increased by $7.9 million to $33.9 million for the nine months
ended September 30, 2016, as compared to the same period in the prior year, primarily driven by product mix and higher excess
capacity charges based on timing of production at our manufacturing facilities, and higher materials costs.

Research and Development Expenses

Our research and development expenses increased by $3.9 million to $37.4 million for the nine months ended
September 30, 2016, as compared to the same period in the prior year, primarily as a result of an increase of $1.5 million
in consulting and outside services and $2.4 million in facilities and rent expense.

Sales, General and Administrative Expenses

Our sales, general and administrative expenses decreased by $7.8 million to $35.1 million for the nine months
ended September 30, 2016, as compared to the same period in the prior year, primarily as a result of decrease of $3.6 million
in consulting and outside services expenses, $2.0 million in salaries and benefits, $1.3 million in facilities expenses and $1.0
million in stock-based compensation expense, offset by an increase of $0.1 million in office expense.

65

Other Income (Expense)

Nine Months Ended September 30,

Period-to-period
Change

Percentage
Change

2016

2015

(Dollars in thousands)

Other income (expense):

Interest income

$

207

$

205

$

2

1

%

Interest expense

(25,989

)

(71,027

)

45,038

(63

)%

Gain/(loss) from change in fair value of derivative instruments

41,826

(10,268

)

52,094

(507

)%

Loss upon extinguishment of debt

(866

)

(5,984

)

5,118

(86

)%

Other income (expense), net

(1,912

)

(1,204

)

(708

)

59

%

Total other income (expense)

$

13,266

$

(88,278

)

$

101,544

(115

)%

Total other income increased by $101.5 million to $13.3 million for the nine months ended September 30,
2016, as compared to the same period in the prior year. The increase was primarily attributable to a $45.0 million decrease in
interest expense as a result of lower accelerated interest accretion, and an increase of $52.1 million in the gain from change
in fair value of derivative instruments, attributed to the compound embedded derivative liabilities associated with certain of
our senior secured convertible promissory notes and the change in fair value of our interest rate swap derivative liability. The
decrease in interest expense is due to lower accelerated interest accretion and the change in the fair value of the derivative
instruments was driven by fluctuation of various inputs used in the valuation models from one reporting period to another, such
as stock price, credit risk rate and estimated stock volatility.

Liquidity and Capital Resources

September 30,
2016

December 31,
2015

(Dollars in thousands)

Working capital deficit, excluding cash and cash equivalents

$

(111,196

)

$

(53,139

)

Cash and cash equivalents and short-term investments

$

2,295

$

13,512

Debt and capital lease obligations

$

176,629

$

156,755

Accumulated deficit

$

(1,085,683

)

$

(1,037,104

)

Nine Months Ended September 30,

2016

2015

(Dollars in thousands)

Net cash used in operating activities

$

(45,383

)

$

(52,217

)

Net cash used in investing activities

$

(496

)

$

(3,304

)

Net cash provided by financing activities

$

34,777

$

25,754

Working Capital Deficit.
Our working capital deficit, excluding cash and cash equivalents, was $111.2 million at September 30,
2016, which represents an increase of $58.1 million compared to a working capital deficit of $53.1 million at December 31, 2015.
The increase of $58.1 million in working capital deficit during the nine months ended September 30, 2016 was primarily due to an
increase of $38.7 million in current portion of debt, $10.6 million in accrued and other current liabilities, $5.8 million in accounts
payable, $0.6 million in deferred revenue and $0.4 million in current capital lease obligations, together with decreases of $3.0
million in inventory, and $0.3 million in other prepaid expense, offset by increases of $1.1 million in accounts receivable, and
$0.2 million in short term investments.

66

To support production of our products in contract
manufacturing and dedicated production facilities, we have incurred, and we expect to continue to incur, capital expenditures as
we invest in these facilities. We plan to continue to seek external debt and equity financing from U.S. and Brazilian sources to
help fund our investment in these contract manufacturing and dedicated production facilities.

We expect to fund our operations for the foreseeable
future with cash and investments currently on hand, cash inflows from collaboration and grant funding, cash contributions from
product sales, and proceeds from new debt and equity financings as well as strategic asset divestments. Some of our anticipated
financing sources, such as research and development collaborations, debt and equity financings and strategic asset divestments,
are subject to risk that we cannot meet milestones, are not yet subject to definitive agreements or mandatory funding commitments
and, if needed, we may not be able to secure additional types of financing in a timely manner or on reasonable terms, if at all.
Our planned 2016 working capital needs and our planned operating and capital expenditures for 2016 are dependent on significant
inflows of cash from renewable product revenues, existing collaboration partners and funds under existing equity facilities, as
well as additional funding from new collaborations, new debt and equity financings and expected proceeds from strategic asset divestments.
We will continue to need to fund our research and development and related activities and to provide working capital to fund production,
storage, distribution and other aspects of our business.

Liquidity
. We have incurred significant losses since our inception and believe that we will continue to incur losses
and have negative cash flow from operations through at least 2017. As of September 30, 2016, we had an accumulated deficit
of $1,085.7 million and had cash, cash equivalents and short term investments of $2.3 million. In March 2016, we entered into
an At Market Issuance Sales Agreement under which we may issue and sell shares of our common stock having an aggregate offering
price of up to $50.0 million from time to time in “at the market” offerings under our Registration Statement on Form
S-3 (File No. 333-203216). This agreement includes no commitment by other parties to purchase shares we offer for sale. See
Note 8, “Significant Agreements” to our unaudited condensed consolidated financial statements included in this report
for further details. As of the date hereof, $50.0 million remained available for future issuance under this facility. In addition,
on September 2, 2016, we sold and issued $3.0 million in convertible promissory notes to a private investor. Refer to Note 5, “Debt”
to our unaudited condensed consolidated financial statements included in this report for further details. We have significant outstanding
debt and contractual obligations related to capital and operating leases, as well as purchase commitments.

As of September 30, 2016, our debt, net of discount and issuance costs of $36.1 million, totaled to
$175.6 million, of which $75.0 million is classified as current. In addition to upcoming debt maturities, our debt service obligations
over the next twelve months are significant, including $16.2 million of anticipated interest payments. Our debt agreements also
contain various covenants, including restrictions on our business that could cause us to be at risk of defaults, such as the requirement
to maintain unrestricted, unencumbered cash in defined U.S. bank accounts in an amount equal to at least 50% of the principal amount
outstanding under our Senior Secured Loan Facility. As discussed above, in connection with the execution by the Company and Ginkgo
Bioworks, Inc., an affiliate of Stegodon, of certain commercial agreements (see Note 8, “Significant Agreements” to
our unaudited consolidated financial statements included in this report for further details), on June 29, 2016, the Company received
a waiver of compliance with such covenant through October 31, 2016 and on October 6, 2016, the Company and Stegodon entered into
an amendment to the loan facility pursuant to which, among other things, Stegodon waived such covenant until the maturity date
of the facility. A failure to comply with the covenants and other provisions of our debt instruments, including any failure to
make a payment when required would generally result in events of default under such instruments, which could permit acceleration
of such indebtedness. If such indebtedness is accelerated, it would generally also constitute an event of default under our other
outstanding indebtedness, permitting acceleration of such other outstanding indebtedness. Any required repayment of our indebtedness
as a result of acceleration or otherwise would lower our current cash on hand such that we would not have those funds available
for use in our business or for payment of other outstanding indebtedness. Refer to Note 5, "Debt", Note 6, “Commitments
and Contingencies” and Note 18, “Subsequent Events” to our unaudited consolidated financial statements included
in this report for further details of our debt arrangements.

Our condensed consolidated financial statements
as of and for the nine months ended September 30, 2016 have been prepared on the basis that the Company will continue as a going
concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Our ability
to continue as a going concern will depend, in large part, on our ability to obtain necessary financing, which is uncertain. The
financial statements do not include any adjustments that might result from the outcome of this uncertainty, which could have a
material adverse effect on our financial condition. In addition, if we are unable to continue as a going concern, we may be unable
to meet our obligations under our existing debt facilities, which could result in an acceleration of our obligation to repay all
amounts outstanding under those facilities, and we may be forced to liquidate our assets. In such a scenario, the values we receive
for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.

If we are unable to generate sufficient cash
contributions from product sales, payments from existing and new collaboration partners and strategic asset divestments and draw
sufficient funds from certain financing commitments due to contractual restrictions and covenants, we will need to obtain additional
funding from equity or debt financings, agree to burdensome covenants, grant further security interests in our assets, enter into
collaboration and licensing arrangements that require us to relinquish commercial rights, or grant licenses on terms that are not
favorable.

If we are unable to raise additional financing,
or if other expected sources of funding are delayed or not received, our ability to continue as a going concern would be jeopardized
and we would take the following actions to support our liquidity needs through the remainder of 2016 and into 2017:

•

Effect significant headcount reductions, particularly with respect to employees not connected to critical or contracted activities
across all functions of the Company, including employees involved in general and administrative, research and development, and
production activities.

•

Shift focus to existing products and customers with significantly reduced investment in new product and commercial development
efforts.

•

Reduce production activity at our Brotas manufacturing facility to levels only sufficient to satisfy volumes required for product
revenues forecast from existing products and customers.

•

Reduce expenditures for third party contractors, including consultants, professional advisors and other vendors.

Closely monitor our working capital position with customers and suppliers, as well as suspend operations at pilot plants and
demonstration facilities.

Implementing this plan could have a negative
impact on our ability to continue our business as currently contemplated, including, without limitation, delays or failures in
our ability to:

•

Achieve planned production levels;

•

Develop and commercialize products within planned timelines or at planned scales; and

•

Continue other core activities.

Furthermore, any inability to scale-back operations
as necessary, and any unexpected liquidity needs, could create pressure to implement more severe measures. Such measures could
have an adverse effect on our ability to meet contractual requirements, including obligations to maintain manufacturing operations,
and increase the severity of the consequences described above.

68

Collaboration Funding.
For the nine months ended September 30, 2016, we received $23.0 million in cash from collaborations, including
$7.8 million under flavors and fragrances collaboration agreements.

We depend on collaboration funding to support
our research and development and operating expenses. While part of this funding is committed based on existing collaboration agreements,
we will be required to identify and obtain funding from additional collaborations. In addition, some of our existing collaboration
funding is subject to our achievement of milestones or other funding conditions.

If we cannot secure sufficient collaboration funding to support our operating expenses in excess of cash
contributions from product sales, existing debt and equity financings and strategic asset divestments, we may need to issue preferred
and/or discounted equity, agree to onerous covenants, grant further security interests in our assets, and enter into collaboration
and licensing arrangements that require us to relinquish commercial rights or grant licenses on terms that are not favorable to
us. If we fail to secure such funding, we could be forced to curtail our operations, which would have a material adverse effect
on our ability to continue with our business plans.

Government Contracts
. In September 2015,
we entered into a Technology Investment Agreement (the “TIA”) with The Defense Advanced Research Project Agency (or
“DARPA”) under which we, with the assistance of five specialized subcontractors, will work to create new research and
development tools and technologies for strain engineering and scale-up activities. The program that is the subject of the TIA is
being performed and funded on a milestone basis. Under the TIA, we and our subcontractors could collectively receive DARPA funding
of up to $35.0 million over the program’s four year term if all of the program’s milestones are achieved. In conjunction
with DARPA’s funding, we and our subcontractors are obligated to collectively contribute approximately $15.5 million toward
the program over its four year term (primarily by providing specified labor and/or purchasing certain equipment). We can elect
to retain title to the patentable inventions we produce in the program, but DARPA receives certain data rights as well as a government
purposes license to certain of such inventions. Either party may, upon written notice and subject to certain consultation obligations,
terminate the TIA upon a reasonable determination that the program will not produce beneficial results commensurate with the expenditure
of resources. We recognized $4.8 million in revenue under this agreement during the nine months ended September 30, 2016.
Total cash received under this agreement as of September 30, 2016 was $4.8 million during the nine months ended September 30,
2016.

Convertible Note Offerings.
In February 2012, we sold $25.0 million in principal amount of senior unsecured convertible promissory notes
due March 1, 2017 as described in more detail in Note 5, "Debt" to our unaudited condensed consolidated financial
statements included in this report.

In July and September 2012, we issued $53.3 million worth of 1.5% Senior Unsecured Convertible Notes to Total
under the July 2012 Agreements for an aggregate of $30.0 million in cash proceeds and our repayment of $23.3 million in previously-provided
research and development funds pursuant to the Total Purchase Agreement as described in more detail under "Related Party Convertible
Notes" in Note 5, "Debt" to our unaudited condensed consolidated financial statements included in this report. As
part of our December 2012 private placement, we issued 1,677,852 shares of our common stock in exchange for the cancellation of
$5.0 million of an outstanding senior unsecured convertible promissory note held by Total.

In June 2013, we issued a 1.5% Senior Unsecured
Convertible Note to Total with a principal amount of $10.0 million with a March 1, 2017 maturity date pursuant to the Total
Fuel Agreements. In July 2013, we sold and issued a 1.5% Senior Unsecured Convertible Note to Total with a principal amount
of $20.0 million with a March 1, 2017 maturity date pursuant to the Total Fuel Agreements.

In August 2013, we entered into an agreement with Total and Temasek to issue up to $73.0 million in convertible
promissory notes in private placements over a period of up to 24 months from the date of signing as described in more detail in
Note 5, "Debt" to our unaudited condensed consolidated financial statements included in this report (such agreement referred
to as the August 2013 SPA and such financing referred to as the August 2013 Financing). The August 2013 Financing was divided
into two tranches (one for $42.6 million and one for $30.4 million). Of the total possible purchase price in the financing, $25.0
million was to be paid in the form of cash by Temasek $25.0 million in the second tranche), $35.0 million was paid by the exchange
and cancellation of the Temasek Bridge Note, as described below, and $13.0 million was to be paid by cancellation of outstanding
convertible promissory notes held by Total in connection with its exercise of pro rata rights ($7.6 million in the first tranche
and $5.4 million in the second tranche).

69

On October 4, 2013, we issued a senior secured
promissory note in the principal amount of $35.0 million (or the "Temasek Bridge Note") to Temasek for cash proceeds
of $35.0 million. The Temasek Bridge Note was due on February 2, 2014 and accrued interest at a rate of 5.5% per month from October
4, 2013. The Temasek Bridge Note was cancelled as payment for Temasek's purchase of a first tranche convertible note in the initial
closing of the August 2013 Financing, as described below.

In October 2013, we amended the August 2013 SPA to include certain entities affiliated with FMR LLC (or the
“Fidelity Entities”) in the first tranche closing (participating for a principal amount of $7.6 million), and to proportionally
increase the amount acquired by exchange and cancellation of outstanding convertible promissory notes by Total to $14.6 million
($9.2 million in the first tranche and up to $5.4 million in the second tranche). Also in October 2013, we completed the closing
of the Tranche I Notes for cash proceeds of $7.6 million and cancellation of outstanding convertible promissory notes of $44.2
million, of which $35.0 million resulted from the cancellation of the Temasek Bridge Note. In December 2013, we amended the August
2013 SPA to sell $3.0 million of senior convertible notes under the second tranche of the August 2013 Financing to funds affiliated
with Wolverine Asset Management, LLC and we elected to call $25.0 million in additional funds from Temasek pursuant to its previous
commitment to purchase such amount of convertible promissory notes in the second tranche. Additionally, pursuant to that amendment,
we sold approximately $6.0 million of convertible promissory notes in the second tranche to Total through cancellation of the same
amount of principal of previously outstanding convertible notes held by Total (in respect of Total’s preexisting contractual
right to maintain its pro rata ownership position through such cancellation of indebtedness). The closing of the sale of such Tranche
II Notes under the December amendment to the August 2013 SPA occurred in January 2014. The August 2013 Financing is more fully
described in Note 5, "Debt" to our unaudited condensed consolidated financial statements included in this report.

In December 2013, in connection with our entry
into agreements establishing our joint venture with Total, we exchanged the $69.0 million of the then-outstanding Total unsecured
convertible notes issued pursuant to the Total Fuel Agreements for replacement 1.5% Senior Secured Convertible Notes, in principal
amounts equal to the principal amount of the cancelled notes.

In May 2014, we issued $75.0 million in aggregate principal amount of the Company’s 6.50% Convertible
Senior Notes due 2019 to Morgan Stanley & Co. LLC as the Initial Purchaser in a private placement, and for initial resale by
the Initial Purchaser to qualified institutional buyers pursuant to Rule 144A of the Securities Act (the “2014 144A Offering”).
The 2014 144A Offering is described in more detail in Note 5, "Debt" to our unaudited condensed consolidated financial
statements included in this report.

In each of July 2014 and January 2015,
we issued 1.5% Senior Secured Convertible Notes to Total pursuant to the Total Fuel Agreements. The aggregate principal amount
of these two notes was $21.7 million and each of such notes has a March 1, 2017 maturity date.

In July 2015, Temasek exchanged approximately
$71.0 million in principal amount of outstanding convertible promissory notes and Total exchanged $70.0 million in principal amount
of outstanding convertible promissory notes for shares of the Company’s common stock, as further described above under “Exchange
(debt conversion)”.

In October 2015, we issued $57.6 million in aggregate principal amount of the Company's 9.50% Convertible
Senior Notes due 2019 (or the "2015 144A Notes"), which were sold only to qualified institutional buyers and institutional
accredited investors in a private placement (or the "2015 144A Offering") under the Securities Act. The 2015 144A Offering
is described in more detail in Note 5, "Debt" to our unaudited condensed consolidated financial statements included in
this report.

70

In March 2016, we sold to Total one half of our ownership stake in TAB in exchange for Total cancelling $1.3
million of R&D Notes and certain other indebtedness, as described in more detail under “Relationship with Total”
above and in Note 5, “Debt” and Note 7, “Joint Ventures and Noncontrolling Interest” to our unaudited condensed
consolidated financial statements included in this report.

In May and September 2016, we issued $13.0
million in aggregate principal amount of convertible promissory notes to a private investor in an offering registered under the
Securities Act, as described in more detail in Note 5, “Debt” to our unaudited condensed consolidated financial statements
included in this report.

Export Financing with ABC Brasil
. In
March 2013, we entered into a one-year export financing agreement with ABC for approximately $2.5 million to fund exports
through March 2014. This loan was collateralized by future exports from our subsidiary in Brazil. As of September 30, 2016,
the loan was fully paid.

In March 2014, we entered into an additional
one-year-term export financing agreement with ABC for approximately $2.2 million to fund exports through March 2015. This loan
is collateralized by future exports from our subsidiary in Brazil. As of September 30, 2016, the loan was fully paid.

In April 2015, we entered into an additional
one-year-term export financing agreement with ABC for approximately $1.6 million to fund exports through April 2016. This loan
is collateralized by future exports from our subsidiary in Brazil. As of September 30, 2016, the loan was fully paid.

Banco Pine/Nossa Caixa Financing
. In
July 2012, we entered into a Note of Bank Credit and a Fiduciary Conveyance of Movable Goods agreement with each of Nossa Caixa
and Banco Pine. Under these instruments, we borrowed an aggregate of R$52.0 million (approximately US$16.0 million based on the
exchange rate as of September 30, 2016) as financing for capital expenditures relating to our manufacturing facility in Brotas,
Brazil. Under the loan agreements, Banco Pine agreed to lend R$22.0 million and Nossa Caixa agreed to lend R$30.0 million. The
loans have a final maturity date of July 15, 2022 and bear a fixed interest rate of 5.5% per year. The loans are also subject
to early maturity and delinquency charges upon occurrence of certain events including interruption of manufacturing activities
at our manufacturing facility in Brotas, Brazil for more than 30 days, except during sugarcane off-season. The loans are secured
by certain of our farnesene production assets at the manufacturing facility in Brotas, Brazil and we were required to provide parent
guarantees to each of the lenders. As of September 30, 2016 and December 31, 2015, a principal amount of $11.7 million and $11.0
million, respectively, was outstanding under these loan agreements.

BNDES Credit Facility
. In December 2011,
we entered into a credit facility with Banco Nacional de Desenvolvimento Econômico e Social (or BNDES), a government-owned
bank headquartered in Brazil (or the "BNDES Credit Facility") to finance a production site in Brazil. The BNDES Credit
Facility was for R$22.4 million (approximately US$6.9 million based on the exchange rate as of September 30, 2016). The credit
line is divided into an initial tranche for up to approximately R$19.1 million and an additional tranche of approximately R$3.3
million that becomes available upon delivery of additional guarantees. As of September 30, 2016 and December 31, 2015, we
had R$4.8 million (approximately US$1.5 million based on the exchange rate as of September 30, 2016) and R$7.6 million (approximately
US$1.9 million based on the exchange rate as of December 31, 2015), respectively, in outstanding advances under the BNDES
Credit Facility.

The principal of loans under the BNDES Credit
Facility is required to be repaid in 60 monthly installments, with the first installment due in January 2013 and the last due in
December 2017. Interest was initially due on a quarterly basis with the first installment due in March 2012. From and after January
2013, interest payments are due on a monthly basis together with principal payments. The loaned amounts carry interest of 7% per
year. Additionally, there is a credit reserve charge of 0.1% on the unused balance from each credit installment from the day immediately
after it is made available through its date of use, when it is paid.

71

The BNDES Credit Facility is collateralized
by first priority security interest in certain of our equipment and other tangible assets totaling R$24.9 million (approximately
US$7.7 million based on the exchange rate as of September 30, 2016). We are a parent guarantor for the payment of the outstanding
balance under the BNDES Credit Facility. Additionally, we were required to provide a bank guarantee equal to 10% of the total approved
amount (R$22.4 million in total debt) available under the BNDES Credit Facility. For advances in the second tranche (above R$19.1
million), we are required to provide additional bank guarantees equal to 90% of each such advance, plus additional Amyris guarantees
equal to at least 130% of such advance. The BNDES Credit Facility contains customary events of default, including payment failures,
failure to satisfy other obligations under the credit facility or related documents, defaults in respect of other indebtedness,
bankruptcy, insolvency and inability to pay debts when due, material judgments, and changes in control of Amyris Brasil. If any
event of default occurs, BNDES may terminate its commitments and declare immediately due all borrowings under the facility.

FINEP Credit Facility.
In November 2010,
we entered into a credit facility with Financiadora de Estudos e Projetos (or "FINEP"), a state-owned company subordinated
to the Brazilian Ministry of Science and Technology (or the “FINEP Credit Facility”) to finance a research and development
project on sugarcane-based biodiesel (or the “FINEP Project”) and provided for loans of up to an aggregate principal
amount of R$6.4 million (approximately US$2.0 million based on the exchange rate as of September 30, 2016) which are secured
by a chattel mortgage on certain equipment of Amyris as well as by bank letters of guarantee. All available credit under this facility
was fully drawn. As of September 30, 2016, the total outstanding loan balance under this credit facility was R$2.5 million
(approximately US$0.8 million based on the exchange rate as of September 30, 2016).

Interest on loans drawn under the FINEP Credit
Facility is fixed at 5.0% per annum. In case of default under, or non-compliance with, the terms of the agreement, the interest
on loans will be dependent on the long-term interest rate as published by the Central Bank of Brazil (such rate, the “TJLP”).
If the TJLP at the time of default is greater than 6%, then the interest will be 5.0% plus a TJLP adjustment factor otherwise the
interest will be at 11.0% per annum. In addition, a fine of up to 10.0% will apply to the amount of any obligation in default.
Interest on late balances will be 1.0% interest per month, levied on the overdue amount. Payment of the outstanding loan balance
is being made in 81 monthly installments, which commenced in July 2012 and extends through March 2019. Interest on loans drawn
and other charges are paid on a monthly basis and commenced in March 2011.

Senior Secured Loan Facility.
In March
2014, we entered into the Senior Secured Loan Facility to make available a loan facility in the aggregate principal amount of up
to $25.0 million, which loan facility was fully drawn at the closing. The initial loan of $25.0 million under the Senior Secured
Loan Facility accrues interest at a rate per annum equal to the greater of either the prime rate reported in the Wall Street Journal
plus 6.25% or 9.5%. We may repay the outstanding amounts under the Senior Secured Credit Facility before the maturity date (February
1, 2017) if we pay an additional fee of 1% of the outstanding amounts. We were also required to pay a 1% facility charge at the
closing of the Senior Secured Credit Facility, and are required to pay a 10% end of term charge with respect to the initial loan
of $25.0 million. In connection with the original Senior Secured Loan Facility, Amyris agreed to certain customary representations
and warranties and covenants, as well as certain covenants that were subsequently amended (as described below).

In June 2014, we and Hercules entered into a
first amendment of the Senior Secured Loan Facility. Pursuant to the first amendment, the parties agreed to adjust the term loan
maturity date from May 31, 2015 to February 1, 2017 and remove (i) a requirement for us to pay a forbearance fee of $10.0
million in the event certain covenants were not satisfied, (ii) a covenant that we maintain positive cash flow commencing with
the fiscal quarter beginning October 1, 2014, (iii) a covenant that, beginning with the fiscal quarter beginning July 1, 2014,
we and our subsidiaries achieve certain projected cash product revenues and projected cash product gross profits, and (iv) an obligation
for us to file a registration statement on Form S-3 with the SEC by no later than June 30, 2014 and complete an equity financing
of more than $50.0 million by no later than September 30, 2014. We further agreed to include a new covenant requiring us to
maintain unrestricted, unencumbered cash in an amount equal to at least 50% of the principal amount then outstanding under the
Senior Secured Loan Facility (or the “Minimum Cash Covenant”) and borrow an additional $5.0 million. The additional
$5.0 million borrowing was completed in June 2014, and accrues interest at a rate per annum equal to the greater of (i) the prime
rate reported in the Wall Street Journal plus 5.25% and (ii) 8.5%.

72

In March 2015, the Company and Hercules entered
into a second amendment of the Senior Secured Loan Facility. Pursuant to the second amendment, the parties agreed to, among other
things, establish an additional credit facility in the principal amount of up to $15.0 million, which would be available to be
drawn by the Company through the earlier of March 31, 2016 or such time as the Company raised an aggregate of at least $20.0 million
through the sale of new equity securities. The additional facility was cancelled undrawn upon the completion of our private stock
and warrant offering in July 2015.

In November 2015, the Company and Hercules entered into a third amendment of the Senior Secured Loan Facility.
Pursuant to the third amendment, the Company borrowed an additional $10,960,000 (or the “Third Amendment Borrowed Amount”)
from Hercules on November 30, 2015. As of December 1, 2015, after the funding of the Third Amendment Borrowed Amount (and including
repayment of $9.1 million of principal that had occurred prior to the third amendment), the aggregate principal amount outstanding
under the Senior Secured Loan Facility was approximately $31.7 million. The Third Amendment Borrowed Amount accrues interest at
a rate per annum equal to the greater of (i) 9.5% and (ii) the prime rate reported in the Wall Street Journal plus 6.25%, and,
like the previous loans under the Senior Secured Loan Facility, has a maturity date of February 1, 2017. Upon the earlier of the
maturity date, prepayment in full or such obligations otherwise becoming due and payable, in addition to repaying the outstanding
Third Amendment Borrowed Amount (and all other amounts owed under the Senior Secured Loan Facility, as amended), the Company is
also required to pay an end-of-term charge of $767,200. Pursuant to the third amendment, the Company also paid Hercules fees of
$1.0 million, $750,000 of which was owed in connection with the expired $15.0 million facility under the second amendment and $250,000
of which was related to the Third Amendment Borrowed Amount. Under the third amendment, the parties agreed that the Company would,
commencing on December 1, 2015, be required to pay only the interest accruing on all outstanding loans under the Senior Secured
Loan Facility until February 29, 2016. Commencing on March 1, 2016, the Company would have been required to begin repaying principal
of all loans under the Senior Secured Loan Facility, in addition to the applicable interest. However, pursuant to the third amendment,
the Company could, by achieving certain cash inflow targets in 2016, extend the interest-only period to December 1, 2016. Upon
the issuance by the Company of $20.0 million of unsecured promissory notes and warrants in a private placement in February 2016
for aggregate cash proceeds of $20.0 million, the Company satisfied the conditions for extending the interest-only period to May
31, 2016. On June 1, 2016, the Company commenced the repayment of outstanding principal under the Senior Secured Loan Facility.
In June 2016, the Company was notified by Hercules that it had transferred and assigned its rights and obligations under the Senior
Secured Loan Facility to Stegodon. On June 29, 2016, in connection with the execution by the Company and Ginkgo Bioworks, Inc.,
an affiliate of Stegodon, of an initial strategic partnership agreement, the Company received a deferment of all scheduled principal
repayments under the Senior Secured Loan Facility, as well as a waiver of the Minimum Cash Covenant, through October 31, 2016.
Refer to Note 8, “Significant Agreements” to our unaudited consolidated financial statements included in this report
for additional details. On October 6, 2016, in connection with the execution by the Company and Ginkgo Bioworks, Inc. of a definitive
collaboration agreement, the Company and Stegodon entered into a fourth amendment of the Senior Secured Loan Facility, pursuant
to which the parties agreed to (i) subject to the Company extending the maturity of certain of its other outstanding indebtedness,
extend the maturity date of the Senior Secured Loan Facility, (ii) make the Senior Secured Loan Facility interest-only until maturity,
subject to the requirement that the Company apply certain monies received under the collaboration agreement between the Company
and Ginkgo Bioworks, Inc. to repay the amounts outstanding under the Senior Secured Loan Facility, up to a maximum amount of $1
million per month and (iii) waive the Minimum Cash Covenant until the maturity date of the Senior Secured Loan Facility. Refer
to Note 8, “Significant Agreements” and Note 18, “Subsequent Events” to our unaudited consolidated financial
statements included in this report for additional details.

As of September 30, 2016, $28.4 million
was outstanding under the Senior Secured Loan Facility, net of discount and issuance cost of $0.1 million. The Senior Secured
Loan Facility is secured by liens on our assets, including on certain of our intellectual property. The Senior Secured Loan Facility
includes customary events of default, including failure to pay amounts due, breaches of covenants and warranties, material adverse
effect events, certain cross defaults and judgments, and insolvency. If an event of default occurs, Stegodon may require immediate
repayment of all amounts outstanding under the Senior Secured Loan Facility. The Company was in compliance with the covenants
under the Senior Secured Loan Facility as of September 30, 2016 and is in compliance with the covenants under the Senior Secured
Loan Facility as of the date hereof.

73

February 2016 Private Placement.
In February 2016, we sold and issued to certain purchasers an aggregate of $20.0 million of unsecured promissory
notes and warrants for the purchase, at an exercise price of $0.01 per share, of an aggregate of 2,857,142 shares of our common
stock, as described in more detail in Note 5, “Debt” to our unaudited condensed consolidated financial statements included
in this report. The exercisability of these warrants was subject to stockholder approval, which was obtained on May 17, 2016.

June 2016 Private Placement.
In June 2016, we sold and issued $5.0 million in aggregate principal amount of secured promissory notes to
Foris Ventures, LLC, as described in more detail in Note 5, “Debt” to our unaudited condensed consolidated financial
statements included in this report.

Common Stock Offerings.
In December 2012,
we completed a private placement of 14,177,849 shares of our common stock for aggregate cash proceeds of $37.2 million, of which
$22.2 million was received in December 2012 and $15.0 million was received in January 2013. Of the 14,177,849 shares issued in
the private placement, 1,677,852 of such shares were issued to Total in exchange for cancellation of $5.0 million of an outstanding
convertible promissory note we previously issued to Total.

In March 2013, we completed a private placement
of 1,533,742 of our common stock to Biolding for aggregate proceeds of $5.0 million. This private placement represented the final
tranche of Biolding's preexisting contractual obligation to fund $15.0 million upon satisfaction by us of certain criteria associated
with the commissioning of our production plant in Brotas, Brazil.

In March 2014, we completed a private placement
of 943,396 shares of our common stock to Kuraray for aggregate proceeds of $4.0 million.

In July 2015, we entered into a Securities Purchase
Agreement with certain purchasers under which we agreed to sell 16,025,642 shares of our common stock at a price of $1.56 per share,
for aggregate proceeds to the Company of $25 million. The sale of common stock under the Securities Purchase Agreement was completed
on July 29, 2015. Pursuant to the Securities Purchase Agreement, the Company granted to each of the purchasers a warrant exercisable
at an exercise price of $0.01 per share for the purchase of a number of shares of the Company’s common stock equal to 10%
of the shares purchased by such investor. The exercisability of the warrants was subject to stockholder approval, which was obtained
on September 17, 2015.

On May 10, 2016, we sold and issued 4,385,964
shares of our common stock to the Bill & Melinda Gates Foundation in a private placement at a purchase price per share equal
to $1.14, for aggregate proceeds to the Company of approximately $5.0 million, as described in more detail in Note 8, “Significant
Agreements.”

Cash Flows during the Nine Months Ended
September 30, 2016 and 2015

Cash Flows from Operating Activities

Our primary uses of cash from operating activities are costs related to production and sales of our products
and personnel-related expenditures, offset by cash received from product sales, grants and collaborations. Cash used in operating
activities was $45.4 million and $52.2 million for the nine months ended September 30, 2016 and 2015, respectively.

Net cash used in operating activities of $45.4 million for the nine months ended September 30, 2016 was attributable
to our net loss of $48.6 million and net non-cash gain of $15.6 million, offset by net change in our operating assets and liabilities
of $18.8 million. Net non-cash gain of $15.6 million for the nine months ended September 30, 2016 consisted primarily of a $41.8
million change in the fair value of derivative instruments related to the embedded derivative liabilities associated with certain
of our senior secured convertible promissory notes and currency interest rate swap derivative liability, offset by $8.4 million
of depreciation and amortization expenses, $9.2 million of amortization of debt discount and issuance costs, $5.6 million of stock-based
compensation, $1.7 million in loss on foreign currency exchange rates, $0.4 million related to technology access, and $0.9 million
on loss from extinguishment of debt. Net change in operating assets and liabilities of $18.8 million for the nine months ended
September 30, 2016 primarily consisted of a $4.3 million increase in accounts payable, $13.6 million increase in accrued other
liabilities, $3.9 million decrease in inventory, and $0.3 increase in deferred revenue, offset by a $1.3 million increase in prepaid
expense, $1.4 million increase in accounts receivable, and $0.6 million decrease in deferred rent.

74

Net cash used in operating activities of $52.2 million for the nine months ended September 30, 2015 was attributable
to our net loss of $176.1 million, offset by net non-cash charges of $97.7 million and net change in our operating assets and liabilities
of $26.2 million. Net non-cash charges of $97.7 million for the nine months ended September 30, 2015 consisted primarily of a$54.6
million of amortization of debt discount, including a $36.6 million charge due to acceleration of accretion of debt discount on
the Total and Temasek convertible notes converted to equity in July 2015, $10.3 million change in the fair value of derivative
instruments related to the embedded derivative liabilities associated with our senior secured convertible promissory notes and
currency interest rate swap derivative liability, $9.9 million of depreciation and amortization expenses, $7.3 million of loss
on purchase commitments and impairment of production assets, $7.0 million of stock-based compensation, $6.0 million of expense
associated with extinguishment and cancellation of convertible note, $2.1 million of loss from investment in affiliates, $0.4 million
of other noncash expenses and $0.1 million on disposition of property, plant and equipment. Net change in operating assets and
liabilities of $26.2 million for the nine months ended September 30, 2015 primarily consisted of $18.7 million increase in accounts
payable and accrued other liabilities, $5.1 million decrease in accounts receivable and related party accounts receivable, $2.7
million increase in deferred revenue related to the funds received under collaboration agreements and $3.3 million increase in
inventory, offset by $3.6 million decrease in prepaid expenses and other assets and deferred rent.

Cash Flows from Investing Activities

Our investing activities consist primarily
of capital expenditures and other investment activities. Net cash used in investing activities of $0.5 million for the nine months
ended September 30, 2016, resulted from $0.7 million of purchases of property, plant and equipment, offset by $0.2 million in
net proceeds from maturities of short-term investments.

Net cash used in investing activities of $3.3
million for the nine months ended September 30, 2015, resulted from $2.3 million of purchases of property, plant and equipment
and $1.2 million in loans made to our equity method investee, Novvi, offset by $0.2 million of change in restricted cash.

Cash Flows from Financing Activities

Net cash provided by financing activities of $34.8 million for the nine months ended September 30, 2016, was
a result of the receipt of $25.0 million of proceeds from debt issued to related parties, $13.3 million of proceeds from other
debt issued, net of discounts and issuance costs, $5.0 million of proceeds from issuance of contingently redeemable equity, and
the receipt of $0.1 million from exercise of common stock options, offset by $7.4 million of principal payments on debt, $1.0 million
of principal payments on capital leases, and $0.2 million of employee's taxes paid upon vesting of restricted stock units.

Net cash provided by financing activities of
$25.8 million for the nine months ended September 30, 2015, was a result of the receipt of $ 25.0 million from the issuance of
common stock in private placements, the receipt of $10.9 million from debt issued to a related party, which related to the closing
of the final installment of the Senior Secured Convertible Notes issued to Total under the July 2012 Agreements, the receipt of
$1.6 million of proceeds from a one-year term export financing agreement with ABC and the receipt of $0.4 million from exercise
of common stock options, offset by $11.2 million of principal payments on debt, $0.6 million of principal payments on capital leases
and $0.3 million of employee's taxes paid upon vesting of restricted stock units.

75

Off-Balance Sheet Arrangements

We did not have during the periods presented,
and we do not currently have, any material off-balance sheet arrangements, as defined under SEC rules, such as relationships with
unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities,
established for the purpose of facilitating financing transactions that are not required to be reflected on our condensed consolidated
financial statements.

Contractual Obligations

The following is a summary of our contractual
obligations as of September 30, 2016 (in thousands):

Total

2016

2017

2018

2019

2020

Thereafter

Principal payments on debt

$

208,489

$

31,603

$

47,809

$

20,930

$

102,975

$

2,002

$

3,170

Interest payments on debt, fixed rate
(1)

38,418

7,797

11,269

13,515

5,462

232

143

Operating leases

47,535

1,762

6,888

6,890

6,777

7,008

18,210

Principal payments on capital leases

998

463

508

27

—

—

—

Interest payments on capital leases

26

9

16

1

—

—

—

Purchase obligations
(2)

1,105

268

808

29

—

—

—

Total

$

296,571

$

41,902

$

67,298

$

41,392

$

115,214

$

9,242

$

21,523

____________________

(1)

Does
not include any obligations related to make-whole interest or downround provisions. The
fixed interest rates are more fully described in Note 5, "Debt” of our condensed
consolidated financial statements.

(2)

Purchase
obligations include noncancellable contractual obligations and construction commitments
of $0.6 million, of which zero have been accrued as loss on purchase commitments.

Recent Accounting Pronouncements

The information contained in Note 2 to the Unaudited
Condensed Consolidated Financial Statements under the heading "Recent Accounting Pronouncements" is hereby incorporated
by reference into this Part I, Item 2.

Our exposure to market risk for changes in interest
rates relates primarily to our investment portfolio and our outstanding debt obligations (including embedded derivatives therein).
We generally invest our cash in investments with short maturities or with frequent interest reset terms. Accordingly, our interest
income fluctuates with short-term market conditions. As of September 30, 2016, our investment portfolio consisted primarily
of money market funds and certificates of deposit, all of which are highly liquid investments. Due to the short-term nature of
our investment portfolio, we do not believe that an immediate 10% increase in interest rates would have a material effect on the
fair value of our portfolio. Since we believe we have the ability to liquidate this portfolio, we do not expect our operating results
or cash flows to be materially affected to any significant degree by a sudden change in market interest rates on our investment
portfolio. Additionally, as of September 30, 2016, 100% of our outstanding debt is in fixed rate instruments or instruments
which have capped rates. Therefore, our exposure to the impact of variable interest rates is limited. Changes in interest rates
may significantly change the fair value of our embedded derivative liabilities.

76

Foreign Currency Risk

Most of our sales contracts are principally
denominated in U.S. dollars and, therefore, our revenues are currently not subject to significant foreign currency risk. The functional
currency of our wholly-owned consolidated subsidiary in Brazil is the local currency (Brazilian real) in which recurring business
transactions occur. We do not use currency exchange contracts as hedges against amounts permanently invested in our foreign subsidiary.
The amount we consider permanently invested in our foreign subsidiary and translated into U.S. dollars using the September 30,
2016 exchange rate is $119.9 million as of September 30, 2016 and $99.5 million at December 31, 2015. The increase in the permanent
investments in our foreign subsidiary between December 31, 2015 and September 30, 2016 is due to the depreciation of the U.S.
dollar versus the Brazilian real. The potential loss in value, which would be principally recognized in Other Comprehensive Loss,
resulting from a hypothetical 10% adverse change in quoted Brazilian real exchange rates, is $2.8 million and $4.9 million as of
September 30, 2016 and December 31, 2015, respectively. Actual results may differ.

We make limited use of derivative instruments,
which include currency interest rate swap agreements, to manage the Company's exposure to foreign currency exchange rate and interest
rate fluctuations related to the Company's Banco Pine loan. In June 2012, we entered into a currency interest rate swap arrangement
with Banco Pine for R$22.0 million (approximately US$6.8 million based on the exchange rate as of September 30, 2016). The
swap arrangement exchanges the principal and interest payments under the Banco Pine loan entered into in July 2012 for alternative
principal and interest payments that are subject to adjustment based on fluctuations in the foreign exchange rate between the U.S.
dollar and Brazilian real. The swap has a fixed interest rate of 3.94%. This arrangement hedges the fluctuations in the foreign
exchange rate between the U.S. dollar and Brazilian real.

We analyzed our foreign currency exposure to
identify assets and liabilities denominated in other currencies. For those assets and liabilities, we evaluated the effects of
a 10% shift in exchange rates between those currencies and the U.S. dollar. We have determined that there would be an immaterial
effect on our results of operations from such a shift.

Commodity Price Risk

Our primary exposure to market risk for changes
in commodity prices currently relates to our purchases of sugar feedstocks. When possible, we manage our exposure to this risk
primarily through the use of supplier pricing agreements.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our
chief executive officer (or “CEO”) and chief financial officer (or “CFO”), evaluated the effectiveness
of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (or the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based
on this evaluation, our CEO and CFO concluded that, as of September 30, 2016, our disclosure controls and procedures are designed
and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit
under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and
forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate,
to allow timely decisions regarding required disclosure.

Our management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and
management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

77

Changes in Internal Control over Financial
Reporting

There were no changes in our internal control
over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act
during our third fiscal quarter ended September 30, 2016 that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness
of Internal Controls

The effectiveness of any system of internal
control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing,
implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly,
any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide
reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for
our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over
financial reporting.

78

PART II

ITEM 1. LEGAL PROCEEDINGS

We may be involved, from time to time, in legal
proceedings and claims arising in the ordinary course of our business. Such matters are subject to many uncertainties and there
can be no assurance that legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse
effect on our business, results of operations, financial position or cash flows.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk.
You should carefully consider the risks and uncertainties described below, together with all of the other information set forth
in this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition or future results. If any
of the following risks actually occurs, our business, financial condition, results of operations and future prospects could be
materially and adversely harmed. The trading price of our common stock could decline due to any of these risks, and, as a result,
you may lose all or part of your investment.

Risks Related to Our Business

We have incurred losses to date, anticipate continuing to
incur losses in the future, and may never achieve or sustain profitability.

We have incurred significant losses in each year since our inception and believe that we will continue to
incur losses and negative cash flow from operations into at least 2017. As of September 30, 2016, we had an accumulated deficit
of $1,085.7 million and had cash, cash equivalents and short term investments of $2.3 million. We have significant outstanding
debt and contractual obligations related to capital and operating leases, as well as purchase commitments of $1.1 million. As of
September 30, 2016, our debt totaled $175.6 million, net of discount and issuance cost of $36.1 million, of which $75.0 million
is classified as current. Our debt service obligations over the next twelve months are significant, including approximately $16.2
million of anticipated interest payments (excluding interest paid in kind by adding to outstanding principal) and may include potential
early conversion payments of up to approximately $13.2 million (assuming all note holders convert) under our outstanding convertible
promissory notes sold on October 20, 2015 pursuant to Rule 144A of the Securities Act (or the "2015 144A Notes"). Furthermore,
our debt agreements contain various financial and operating covenants, including restrictions on business that could cause us to
be at risk of defaults. We expect to incur additional costs and expenses related to the continued development and expansion of
our business, including construction and operation of our manufacturing facilities, contract manufacturing, research and development
operations, and operation of our pilot plants and demonstration facility. There can be no assurance that we will ever achieve or
sustain profitability on a quarterly or annual basis.

Our unaudited condensed consolidated financial
statements as of and for the nine months ended September 30, 2016 have been prepared on the basis that we will continue as a going
concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have
incurred significant losses since our inception and we expect that we will continue to incur losses as we aim to successfully execute
our business plan and will be dependent on additional public or private financings, collaborations or licensing arrangements with
strategic partners, or through additional credit lines or other debt financing sources to fund continuing operations. Based on
our cash balances, recurring losses since inception and our existing capital resources to fund our planned operations for a twelve
month period, there is substantial doubt about our ability to continue as a going concern. Our operating plan for 2016 contemplates
a significant reduction in our net cash outflows resulting from (i) revenue growth from sales of existing and new products with
positive gross margins, (ii) reduced production costs as a result of manufacturing and technical developments, (iii) increased
cash inflows from collaborations, (iv) reduced operating expenses, (v) access to various financing commitments, and (vi) strategic
asset divestments. In addition, as noted below, for our 2016 operating plan, we are dependent on funding from sources that are
not subject to existing commitments. We will need to obtain additional funding from equity or debt financings, which may require
us to agree to burdensome covenants, grant further security interests in our assets, enter into collaboration and licensing arrangements
that require us to relinquish commercial rights, or grant licenses on terms that are not favorable. No assurance can be given at
this time as to whether we will be able to achieve our expense reduction or fundraising objectives, regardless of the terms. If
we are unable to raise additional financing, or if other expected sources of funding are delayed or not received, our ability to
continue as a going concern would be jeopardized and we may be forced to delay, scale back or eliminate some of our general and
administrative, research and development, or production activities or other operations and reduce investment in new product and
commercial development efforts in an effort to provide sufficient funds to continue our operations. If any of these events occurs,
our ability to achieve our development and commercialization goals would be adversely affected. In addition, if we are unable to
continue as a going concern, we may be unable to meet our obligations under our existing debt facilities, which could result in
an acceleration of our obligation to repay all amounts outstanding under those facilities, and we may be forced to liquidate our
assets. In such a scenario, the values we receive for our assets in liquidation or dissolution could be significantly lower than
the values reflected in our financial statements.

79

Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty, which could have a material adverse effect on our financial
condition and cause investors to suffer the loss of all or a substantial portion of their investment.

We have limited experience producing our products at commercial
scale and may not be able to commercialize our products to the extent necessary to sustain and grow our current business.

To commercialize our products, we must be successful
in using our yeast strains to produce target molecules at commercial scale and at a commercially viable cost. If we cannot achieve
commercially-viable production economics for enough products to support our business plan, including through establishing and maintaining
sufficient production scale and volume, we will be unable to achieve a sustainable integrated renewable products business. Virtually
all of our production capacity is through a purpose-built, large-scale production plant in Brotas, Brazil. This plant commenced
operations in 2013, and scaling and running the plant has been, and continues to be, a time-consuming, costly, uncertain and expensive
process. Given our limited experience commissioning and operating our own manufacturing facilities and our limited financial resources,
we cannot be sure that we will be successful in achieving production economics that allow us to meet our plans for commercialization
of various products we intend to offer. In addition, until recently we have only produced Biofene at the Brotas plant. Our attempts
to scale production of new molecules at the plant are subject to uncertainty and risk. For example, even to the extent we successfully
complete product development in our laboratories and pilot and demonstration facilities, and at contract manufacturing facilities,
we may be unable to translate such success to large-scale, purpose-built plants. If this occurs, our ability to commercialize our
technology will be adversely affected and we may be unable to produce and sell any significant volumes of our products. Also, with
respect to products that we are able to bring to market, we may not be able to lower the cost of production, which would adversely
affect our ability to sell such products profitably.

We will require significant inflows of cash from financing
and collaboration transactions to fund our anticipated operations and to service our debt obligations and may not be able to obtain
such financing and collaboration funding on favorable terms, if at all.

Our planned 2016 and 2017 working capital needs,
our planned operating and capital expenditures for 2016 and 2017, and our ability to service our outstanding debt obligations are
dependent on significant inflows of cash from existing and new collaboration partners and cash contribution from growth in renewable
product sales. We will continue to need to fund our research and development and related activities and to provide working capital
to fund production, storage, distribution and other aspects of our business. Some of our anticipated financing sources, such as
research and development collaborations, are subject to the risk that we cannot meet milestones, that the collaborations may end
prematurely for reasons that may be outside of our control (including technical infeasibility of the project or a collaborator's
right to terminate without cause), or the collaborations are not yet subject to definitive agreements or mandatory funding commitments
and, if needed, we may not be able to secure additional types of financing in a timely manner or on reasonable terms, if at all.
The inability to generate sufficient cash flow, as described above, could have an adverse effect on our ability to continue with
our business plans and our status as a going concern.

80

If we are unable to raise additional financing,
or if other expected sources of funding are delayed or not received, our ability to continue as a going concern would be jeopardized
and we would take the following actions to support our liquidity needs through the remainder of 2016 and into 2017:

•

Effect significant headcount reductions, particularly with respect to employees not connected to critical or contracted activities
across all functions of the Company, including employees involved in general and administrative, research and development, and
production activities.

•

Shift focus to existing products and customers with significantly reduced investment in new product and commercial development
efforts.

•

Reduce production activity at our Brotas manufacturing facility to levels only sufficient to satisfy volumes required for product
revenues forecast from existing products and customers.

•

Reduce expenditures for third party contractors, including consultants, professional advisors and other vendors.

Closely monitor the Company's working capital position with customers and suppliers, as well as suspend operations at pilot
plants and demonstration facilities.

Implementing this plan could have a negative
impact on our ability to continue our business as currently contemplated, including, without limitation, delays or failures in
our ability to:

•

Achieve planned production levels;

•

Develop and commercialize products within planned timelines or at planned scales; and

•

Continue other core activities.

Furthermore, any inability to scale-back operations
as necessary, and any unexpected liquidity needs, could create pressure to implement more severe measures. Such measures could
have an adverse effect on our ability to meet contractual requirements, including obligations to maintain manufacturing operations,
and increase the severity of the consequences described above.

Future revenues are difficult to predict, and our failure
to predict revenue accurately may cause our results to be below our expectations or those of analysts or investors and could result
in our stock price declining.

Our revenues are comprised of product revenues
and grants and collaborations revenues. We generate the substantial majority of our product revenues from sales to distributors
or collaborators and only a small portion from direct sales. Our collaboration and distribution agreements do not include any specific
purchase obligations. The sales volume of our products in any given period has been difficult to predict. A significant portion
of our product sales is dependent upon the interest and ability of third party distributors to create demand for, and generate
sales of, such products to end-users. For example, if such distributors are unsuccessful in creating pull-through demand for our
products with their customers, such distributors may purchase less of our products from us than we expect. In addition, many of
our new and novel products are intended to be a component of other companies’ products; therefore, sales of our products
may be contingent on our collaborators’ and/or customers’ timely and successful development and commercialization of
end-use products that incorporate our products. Furthermore, we have begun to market and sell some of our products directly to
end-consumers, initially in the cosmetics and industrial cleaning markets. Because we have no prior experience in marketing and
selling directly to consumers, it is difficult to predict how successful our efforts will be and we may not achieve the product
sales we expect to achieve in the timeline we anticipate (if at all).

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In addition, we have entered into research and
development collaboration arrangements pursuant to which we receive payments from our collaborators. Some of such collaboration
arrangements include advance payments in consideration for grants of exclusivity or research efforts to be performed by us. It
has in the past been difficult for us to know with certainty when we will sign a new collaboration arrangement. As a result, achievement
of our quarterly and annual goals, expressed in part via a non-GAAP financial measure that we refer to as cash revenue inflows
consisting of GAAP product revenues plus cash payments from collaborations and grants, has been difficult to predict with certainty.
Once a collaboration agreement has been signed, receipt of payments and/or recognition of related revenues may depend on our achievement
of milestones. In addition, a portion of the revenue we report each quarter results from the recognition of deferred revenue from
advance payments we have received from these collaborators during previous quarters. Since our business model depends in part on
collaboration agreements with advance payments that we recognize over time, it may also be difficult for us to rapidly increase
our revenues through additional collaborations in any period, as revenue from such new collaborations will often be recognized
over multiple quarters or years.

These factors have made it difficult to predict
future revenues and have resulted in our revenues being below our previously announced guidance or analysts’ estimates. We
continue to face these risks in the future, which may cause our stock price to decline.

A limited number of distributors, customers and collaboration
partners account for a significant portion of our revenue, and the loss of major distributors, customers or collaboration partners
could harm our operating results.

Our revenues have varied significantly from
quarter to quarter and are dependent on sales to, and collaborations with, a limited number of distributors, customers and/or collaboration
partners. We cannot be certain that distributors, customers and/or collaboration partners that have accounted for significant revenue
in past periods, individually or as a group, will continue to generate similar revenue in any future period. If we fail to renew
with, or if we lose a major distributor, customer or collaborator or group of distributors, customers or collaborators, our revenue
could decline if we are unable to replace the lost revenue with revenue from other sources.

As of September 30, 2016, our debt totaled $175.6 million, net of discount and issuance costs of $36.1 million,
of which $75.0 million is classified as current. Our cash balance is substantially less than the principal amount of our outstanding
debt, and we will be required to generate cash from operations or raise additional working capital through future financings or
sales of assets to enable us to repay this indebtedness as it becomes due. There can be no assurance that we will be able to do
so.

In addition, we have agreed to significant covenants
in connection with our debt financing transactions, including restrictions on our ability to incur future indebtedness, and customary
events of default, including failure to pay amounts due, breaches of covenants and warranties, material adverse effect events,
certain cross defaults and judgments, and insolvency. A failure to comply with the covenants and other provisions of our debt instruments,
including any failure to make a payment when required would generally result in events of default under such instruments, which
could permit acceleration of such indebtedness and could result in a material adverse effect events on us. If such indebtedness
is accelerated, it would generally also constitute an event of default under our other outstanding indebtedness, permitting acceleration
of such other outstanding indebtedness. Any required repayment of our indebtedness as a result of acceleration or otherwise would
lower our current cash on hand such that we would not have those funds available for use in our business or for payment of other
outstanding indebtedness.

If we are at any time unable to generate sufficient
cash flow from operations to service our indebtedness when payment is due, we may be required to attempt to renegotiate the terms
of the instruments relating to the indebtedness, seek to refinance all or a portion of the indebtedness or obtain additional financing.
There can be no assurance that we will be able to successfully renegotiate such terms, that any such refinancing would be possible
or that any additional financing could be obtained on terms that are favorable or acceptable to us. Any debt financing that is
available could cause us to incur substantial costs and subject us to covenants that significantly restrict our ability to conduct
our business. If we seek to complete additional equity financings, the interests of existing equity holders may be diluted.

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In addition, the covenants in our debt agreements
materially limit our ability to take certain actions, including our ability to pay dividends, make certain investments and other
payments, undertake certain mergers and consolidations, and encumber and dispose of assets. For example, the purchase agreement
for convertible notes that we sold in separate closings in October 2013 and January 2014, which we refer to as the Tranche Notes,
requires us to obtain the consent of a majority of the purchasers of these notes before completing any change-of-control transaction,
or purchasing assets in one transaction or a series of related transactions in an amount greater than $20.0 million, in each case
while the Tranche Notes are outstanding. The holders of the Tranche Notes also have pro rata rights to invest in, and under which
they could cancel up to the full amount of their outstanding Tranche Notes to pay for, equity securities that we issue in certain
financings, which could delay or prevent us from completing such financings.

Our substantial leverage could adversely affect our ability to fulfill our obligations
under our existing indebtedness and may place us at a competitive disadvantage in our industry.

We continue to have substantial debt outstanding
and we may incur additional indebtedness from time to time to finance working capital, product development efforts, strategic acquisitions,
investments and alliances, capital expenditures or other general corporate purposes, subject to the restrictions contained in our
existing indebtedness and in any other agreements under which we incur indebtedness. Our significant indebtedness and debt service
requirements could adversely affect our ability to operate our business and may limit our ability to take advantage of potential
business opportunities. For example, our high level of indebtedness presents the following risks:

•

we will be required to use a substantial portion of our cash flow from operations to pay principal
and interest on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures,
product development efforts, acquisitions, investments and strategic alliances and other general corporate requirements;

•

our substantial leverage increases our vulnerability to economic downturns and adverse competitive
and industry conditions and could place us at a competitive disadvantage compared to those of our competitors that are less leveraged;

•

our debt service obligations could limit our flexibility in planning for, or reacting to, changes
in our business and our industry and could limit our ability to pursue other business opportunities, borrow more money for operations
or capital in the future and implement our business strategies;

•

our level of indebtedness and the covenants within our debt instruments may restrict us from raising
additional financing on satisfactory terms to fund working capital, capital expenditures, product development efforts, strategic
acquisitions, investments and alliances, and other general corporate requirements; and

•

our substantial leverage may make it difficult for us to attract additional financing when needed.

If we are at any time unable to generate sufficient
cash flow from operations to service our indebtedness when payment is due, we may be required to attempt to renegotiate the terms
of the instruments relating to the indebtedness, seek to refinance all or a portion of the indebtedness or obtain additional financing.
There can be no assurance that we will be able to successfully renegotiate such terms, that any such refinancing would be possible
or that any additional financing could be obtained on terms that are favorable or acceptable to us.

A failure to comply with the covenants and other
provisions of our debt instruments, including any failure to make a payment when required, could result in events of default under
such instruments, and which could permit acceleration of such indebtedness. If such indebtedness is accelerated, it could also
constitute an event of default under our other outstanding indebtedness, permitting acceleration of such other outstanding indebtedness.
Any required repayment of our indebtedness as a result of acceleration or otherwise would lower our current cash on hand such that
we would not have those funds available for use in our business or for payment of other outstanding indebtedness.

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Our GAAP operating results could fluctuate substantially due to the accounting
for the early conversion payment features of outstanding convertible promissory notes.

Several of our outstanding convertible debt
instruments are accounted for under Accounting Standards Codification 815, Derivatives and Hedging (or “ASC 815”) as
an embedded derivative. For instance, with respect to the 2015 144A Notes, if the holders elect convert their 2015 144A Notes,
such converting holders will receive an early conversion payment equal to the present value of the remaining scheduled payments
of interest that would have been made on the 2015 144A Notes being converted from the earlier of the date that is three years after
the date we receive such notice of conversion and the maturity of the 2015 144A Notes. Our 6.50% Convertible Senior Notes due 2019
(or the “2014 144A Notes”) contain a similar early conversion payment feature, provided that the last reported sale
price of our common stock for 20 or more trading days (whether or not consecutive) in a period of 30 consecutive trading days ending
within five trading days immediately prior to the date we receive a notice of such election to convert exceeds the conversion price
in effect on each such trading day. The early conversion payment features of the 2014 144A Notes and the 2015 144A Notes are accounted
for under ASC 815 as embedded derivatives. ASC 815 requires companies to bifurcate conversion options from their host instruments
and account for them as free standing derivative financial instruments according to certain criteria. The fair value of the derivative
is remeasured to fair value at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair
value of the derivative being charged to earnings (loss). We have determined that we must bifurcate and account for the early conversion
payment features of the 2014 144A Notes and the 2015 144A Notes, as well as certain other features of our other convertible debt
instruments, as embedded derivatives in accordance with ASC 815. We have recorded these embedded derivative liabilities as non-current
liabilities on our consolidated balance sheet with a corresponding debt discount at the date of issuance that is netted against
the principal amount of the 2014 144A Notes, the 2015 144A Notes or other convertible debt instrument, as applicable. The derivative
liabilities are remeasured to fair value at each balance sheet date, with a resulting non-cash gain or loss related to the change
in the fair value of the derivative liabilities being recorded in other income or loss. There is no current observable market for
this type of derivative and, as such, we determine the fair value of the embedded derivatives using the binomial lattice model.
The valuation model uses the stock price, conversion price, maturity date, risk-free interest rate, estimated stock volatility
and estimated credit spread. Changes in the inputs for these valuation models may have a significant impact on the estimated fair
value of the embedded derivative liabilities. For example, an increase in the Company's stock price results in an increase in the
estimated fair value of the embedded derivative liabilities. The embedded derivative liabilities may have, on a GAAP basis, a substantial
effect on our balance sheet from quarter to quarter and it is difficult to predict the effect on our future GAAP financial results,
since valuation of these embedded derivative liabilities are based on factors largely outside of our control and may have a negative
impact on our earnings and balance sheet.

If our major production facilities do not successfully commence
or scale up operations, our customer relationships, business and results of operations may be adversely affected.

A substantial component of our planned production
capacity in the near and long term depends on successful operations at our large-scale production plant in Brazil. We are currently
operating our first purpose-built, large-scale production plant in Brotas, Brazil and may complete construction of certain other
facilities in the coming years. Delays or problems in the construction, start-up or operation of these facilities will cause delays
in our ramp-up of production and hamper our ability to reduce our production costs. Delays in construction can occur due to a variety
of factors, including regulatory requirements and our ability to fund construction and commissioning costs. For example, in 2012
we determined it was necessary to delay further construction of our large-scale manufacturing facility with São Martinho
in order to focus on the construction and commissioning of our Brotas facility. We have since permanently ceased construction of
the São Martinho facility, and expect to need to identify additional production capacity as early as 2017 based on anticipated
volume requirements. Once our large-scale production facilities are built, we must successfully commission them and they must perform
as we have designed them. If we encounter significant delays, cost overruns, engineering issues, contamination problems, equipment
or raw material supply constraints, unexpected equipment maintenance requirements, safety issues, work stoppages or other serious
challenges in bringing these facilities online and operating them at commercial scale, we may be unable to produce our initial
renewable products in the time frame we have planned. Industrial scale fermentation is an emerging field and it is difficult to
predict the effects of scaling up production to commercial scale, which involves various risks to the quality and consistency of
our molecules. In addition, in order to produce molecules at our plant at Brotas, we have been and will be required to perform
thorough transition activities, and modify the design of the plant. Any modifications to the production plant could cause complications
in the operations of the plant, which could result in delays or failures in production. We may also need to continue to use contract
manufacturing sources more than we expect (e.g., if the modifications to the Brotas plant are not successful or have a negative
impact on the plant's operations), which would reduce our anticipated gross margins and may prevent us from accessing certain markets
for our products. Further, if our efforts to increase (or commence, as the case may be) production at these facilities are not
successful, other mill owners in Brazil or elsewhere may decide not to work with us to develop additional production facilities,
demand more favorable terms or delay their commitment to invest capital in our production.

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Our reliance on the large-scale production plant in Brotas, Brazil subjects us
to execution and economic risks.

Our decision to focus our efforts for production
capacity on the manufacturing facility in Brotas, Brazil means that we have limited manufacturing sources for our products in 2016
and beyond. Accordingly, any failure to establish operations at that plant could have a significant negative impact on our business,
including our ability to achieve commercial viability for our products. With the facility in Brotas, Brazil, we are, for the first
time, operating a commercial fermentation and separation facility ourselves. We may face unexpected difficulties associated with
the operation of the plant. For example, we have in the past, at certain contract manufacturing facilities and at the Brotas facility,
encountered delays and difficulties in ramping up production based on contamination in the production process, problems with plant
utilities, lack of automation and related human error, issues arising from process modifications to reduce costs and adjust product
specifications or transition to producing new molecules, and other similar challenges. We cannot be certain that we will be able
to remedy all of such challenges quickly or effectively enough to achieve commercially viable near-term production costs and volumes.

To the extent we secure collaboration arrangements
with new or existing partners, we may be required to make significant capital investments at our existing or new facilities in
order to produce molecules or other products for such collaborations. Any failure or difficulties in establishing, building up
or retooling our operations for these new collaboration arrangements could have a significant negative impact on our business,
including our ability to achieve commercial viability for our products, lead to the inability to meet our contractual obligations
and could cause us to allocate capital, personnel and other resources from our organization which could adversely affect our business
and reputation.

As part of our arrangement to build the plant
in Brotas, Brazil we have an agreement with Tonon Bioenergia S.A. (or “Tonon”) to purchase from Tonon sugarcane juice
corresponding to a certain number of tons of sugarcane per year, along with specified water and vapor volumes. Until this annual
volume is reached, we are restricted from purchasing sugarcane juice for processing in the facility from any third party, subject
to limited exceptions, unless we pay the premium to Tonon that we would have paid if we bought the juice from them. As such, we
will be relying on Tonon to supply such juice and utilities on a timely basis, in the volumes we need, and at competitive prices.
If a third party can offer superior prices and Tonon does not consent to our purchasing from such third party, we would be required
to pay Tonon the applicable premium, which would have a negative impact on our production cost. Furthermore, we agreed to pay a
price for the juice that is based on the lower of the cost of two other products produced by Tonon using such juice, plus a premium.
Tonon may not want to sell sugarcane juice to us if the price of one of the other products is substantially higher than the one
setting the price for the juice we purchase. While the agreement provides that Tonon would have to pay a penalty to us if it fails
to supply the agreed-upon volume of juice for a given month, the penalty may not be enough to compensate us for the increased cost
if third-party suppliers do not offer competitive prices. Also, if the prices of the other products produced by Tonon increase,
we could be forced to pay those increased prices for production without a related increase in the price at which we can sell our
products, reducing or eliminating any margins we can otherwise achieve. If in the future these supply terms no longer provide a
viable economic structure for the operation in Brotas, Brazil we may be required to renegotiate our agreement, which could result
in manufacturing disruptions and delays. In December 2015, Tonon filed for bankruptcy protection in Brazil. If Tonon is unable